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Unconventional AI, founded by Naveen Rao, has secured $475 million at $4.5 billion valuation to develop energy-efficient AI computers.
The funding was co-led by Andressen Horowitz and Lightspeed Venture Partners, with participation from Lux Capital, DCVC, and Databricks. Amazon founder Jeff Bezos and Rao himself also participated in the round.
Unconventional AI is Rethinking the Hardware Behind AI’s Future
Unconventional AI was founded in September 2025 by former Databricks AI chief Naveen Rao, Michael Carbin, Sara Achour, and MeeLan Lee. The startup aims to build a radically more energy-efficient computer tailored for artificial intelligence.
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The rapid success of large language models has fueled a reliance on scaling laws, where more computing power and data drive leaps in capability. However, this trajectory depends heavily on energy availability, and demand is outpacing supply. Rao believes the next breakthrough isn’t a bigger model, but a new machine designed for high-intensity learning workloads.
Unconventional AI is exploring biology-inspired ideas, with energy efficiency as a key focus. The human brain, for example, performs complex computations on just 20 watts, unlike today’s power-hungry AI systems.
“The next several years are going to be about trying out a number of ideas and prototypes and coming up with the exact paradigm of what we believe will scale most efficiently and cost-effectively,” Rao said to Bloomberg.
The startup is investigating how biological principles and analogue computing can create processors that leverage the physics of semiconductors, moving beyond brute-force digital switching.
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Meet Naveen Rao, the Serial Entrepreneur
Rao, who was formerly the head of artificial intelligence at Databricks, has already raised hundreds of millions. He previously co-founded MosaicML, which Databricks acquired for $1.3 billion. He also previously sold Nervana Systems to Intel in 2016.
For Unconventional AI, this funding represents only the first phase of a larger plan that could reach $1 billion. Rao plans to begin building the startup without waiting for the full $1 billion round to close, according to TechCrunch. The startup will raise the remaining capital in installments, a funding approach commonly referred to as a “tranched” round.
The serial entrepreneur publicly acknowledged Unconventional AI on X last week, confirming its name and describing its hoped-for product as “rethinking the foundations of a computer to build a new substrate for intelligence that is as efficient as biology. Brain Scale Efficiency without the biological baggage!”
With the funding, Rao joins the ranks of prominent tech executives with multibillion-dollar startups. Others include former OpenAI CTO Mira Murati (Thinking Machine Labs, $10B), OpenAI co-founder Ilya Sutskever (Safe Superintelligence, $30B+), and ex-Salesforce co-CEO Bret Taylor (Sierra, $10B).
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The deal was co-led by Andreessen Horowitz and Lightspeed Venture Partners, said Naveen Rao, who left Databricks in September and is the startup’s chief executive officer. Other investors include Lux Capital, DCVC, Databricks, and Amazon founder Jeff Bezos. Rao said he invested $10 million of his own funds at the same terms as other investors.
