(Bloomberg) -- Hailo Technologies Ltd, an Israel-based artificial intelligence chipmaker, has raised $120 million in funding — the latest sign of investor enthusiasm for startups that can help address a global chip shortage and fuel the development of generative AI. 

Hailo said Tuesday that a number of Israeli firms and family offices participated in the funding round, including Delek Motors Ltd., OurCrowd Ltd. and Poalim Equity Ltd. The investment, part of an extended Series C round, brings the company’s total funding to date to $340 million and values Hailo at $1.2 billion.

The frenzy around generative artificial intelligence has sparked feverish demand for advanced chips that can support the intense data processing needs required to develop AI tools. Along with the latest fundraise, Hailo unveiled a new AI processor called Hailo-10, which is designed to consume less power while supporting a range of AI services, including the large language models that underpin chatbots. 

“We will invest the funds in developing the next wave of chip technology,” said Orr Danon, 38, the startup’s co-founder and chief executive officer.

Hailo, founded in 2017, specializes in designing processors for the so-called edge, meaning it can handle AI computing needs locally on a smartphone or robot, rather than relying on a remote data center. The company’s new AI processor will be able to support versions of large language models from Stable Diffusion and Meta Platforms Inc. “with the smallest power consumption,” Danon said. 

“Whether users employ GenAI to automate real-time translation or summarization services, generate software code, or images and videos from text prompts, Hailo-10 lets them do it directly on their PCs or other edge systems,” Danon said, “without draining the battery or straining” the device’s central processing unit. 

A roster of customers will start deploying Hailo’s new processors next quarter, Danon said. “It’ll be a mix of use cases, such as robots, motion control, visual understanding and so on,” he said.

The startup’s existing global clients include PC maker Dell Technologies Inc., China’s autonomous driving startup iMotion Automotive Technology Suzhou Co. and electronics maker Hon Hai Precision Industry Co. But Hailo also faces a fiercely competitive market segment dominated by giant rivals like Nvidia Corp.

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