- Lip-Bu Tan is a renowned chip industry veteran with experience as CEO, board member, and investor.
- Tan has held roles at Intel and SoftBank and brought Cadence back from the brink of crisis.
- Tan invests in startups challenging Nvidia’s power-hungry GPUs with efficient alternatives.
When Lip-Bu Tan speaks, the chip industry listens.
The semiconductor executive and investor has wielded his influence over most of the major names in the chip business and served on the boards of Annapurna Labs — which now fuels Amazon’s chip ambitions — SoftBank, and Intel, among others.
Tan was even reported to be a candidate for Intel’s open CEO spot, though when Business Insider spoke to him, he smiled and said “no comment” on that issue.
His legendary status was solidified long ago when he orchestrated an intervention at Cadence Design Systems — a semiconductor design firm in crisis.
He stepped in as CEO in 2009 with the stock below three dollars. He revamped the company’s approach to its tech road map and customer relations and overhauled the business model from a perpetual license model to a subscription. Today, the stock is above $320 per share. He stayed in the CEO seat until 2021.
Tan’s reputation is such that the day he resigned from Intel’s board in August, the firm’s stock dropped 6%.
He is supporting many players in the AI boom with funds and advice, he said. His investment firm, Walden International, has over $1.5 billion in assets under management, and funds startups via its $500 million venture fund Walden Catalyst, which he cofounded in 2021 with fellow chip industry veteran Young Sohn.
Nvidia investment alternatives
Tan is also a personal friend of both AMD CEO Lisa Su and Nvidia CEO Jensen Huang.
In fact, Tan told BI that when Huang told him many years ago that Nvidia would be a full-platform company with software just as valuable as its hardware, they argued.
“I said, ‘No, you’re semiconductor company.’ And he said, ‘No, you’re completely wrong. I’m a software and system company,'” Tan recounted.
Today, Tan admits Huang was right. Nvidia’s CUDA software is envied by many who try to compete with the $3 trillion juggernaut. Its 70% profit margins also make it look more like a software company than a chip firm.
But graphic processing units do have one problem. They are “power hungry,” Tan said. That’s where his attention is going when it comes to new companies looking to challenge Nvidia.
Tan personally invested in SambaNova Systems in 2018 for this reason.
“We can deliver the same performance at one-tenth of the power,” he said of SambaNova.
Tan is also an investor in startup Rivos, which was founded in 2021. Both companies offer an alternative computing architecture to Nvidia and AMD’s GPUs and claim to offer dramatic gains in power, speed, and cost-efficiency.
“Everybody is looking for an alternative. They are still going big time with Nvidia, but they are looking for 10%, or 15% of the different workloads that can use a better solution,” he said.
That minority of the market, driven by concerns about cost and diversification, is where the opprtuntiy lies for Nvidia alternatives, he said.
On top of startups, AMD and companies like Broadcom, Marvel, and Micron Technology also stand to grow as the need for compute expands, he said.
He is especially looking for opportunities in industries where AI may have an outsized impact. Backing smart investments in applied AI means knowing where the data is, according to Tan.
“AI is already a 60-year-old technology. But really, the big difference is the data, the massive, massive data that is starting to become available,” he said.
“Whatever business you want to be in, you have to be close to the data. If you are close to the data, you have a very strong chance of success,” he continued. Healthcare AI — identifying important biomarkers and medical drug discovery — is where he sees the most opportunity today.
“I’m heavily investing in medical,” he said.
