DeepX, a South Korean AI chip designer, has hired Morgan Stanley to help raise new capital ahead of a potential IPO, aiming to go public as early as 2027.

The company is reportedly seeking to raise more than the 110 billion won (US$79 million) it secured in its series C round last year.

DeepX specializes in on-device AI chips for devices such as robots and drones, focusing on solutions that do not require constant cloud connections.

It recently partnered with China’s Baidu Inc. to work on industrial AI projects and will join Baidu’s open-source deep learning framework, PaddlePaddle.

DeepX is among several South Korean AI chip startups, including FuriosaAI Inc., which raised US$125 million last month.

Representatives for DeepX and Morgan Stanley declined to comment.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ AI chip startups follow predictable funding timelines as market growth accelerates

DeepX’s fundraising trajectory reflects a common pattern among AI chip startups preparing for public markets during a period of explosive market growth.

The company’s progression from a $79 million Series C last year to a larger funding round now, followed by a planned 2027 IPO, mirrors the typical 2-3 year gap between major funding milestones that successful hardware startups require for product development and market validation.

This timeline aligns with broader market dynamics, as the global AI chip market is projected to grow from $123.16 billion in 2024 to $311.58 billion by 20291.

DeepX isn’t alone in this funding surge. Fellow South Korean startup FuriosaAI secured $125 million just last month, indicating strong investor appetite for AI chip ventures from the region that’s home to the world’s top memory makers.

The strategic timing suggests these startups are positioning themselves to capture market share during the peak growth phase, when the market is expected to expand at a 24.4% compound annual growth rate over the next five years1.

2️⃣ On-device AI chips offer startups a path around Nvidia’s cloud dominance

DeepX’s focus on on-device chips for robots and drones represents a strategic positioning away from Nvidia’s stronghold in cloud-based AI processing.