Euclyd, a European artificial intelligence (AI) chip startup, is raising new funding to build its technology, aiming to rival the Graphics Processing Units (GPUs) built by Nvidia (NVDA). According to Euclyd founder Bernardo Kastrup, the company is expecting to raise at least $118 million to support its growth as the AI chip market surges in Europe.
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Euclyd, founded in 2024 and backed by the former CEO of ASML Holdings (ASML) Peter Wennink, is developing AI chip technology to challenge traditional GPU-based architectures. The company claims its system could deliver up to 100 times higher power efficiency for AI inference compared to Nvidia’s latest chips. However, its technology is yet to be fully adopted by the AI chip industry.
Unlike traditional GPUs that move data through memory, Euclyd’s system claims to process data in multiple locations at once. This will reportedly help reduce energy use, cost, and the size of AI data centers.
Notably, other newer companies in the sector, such as Optalysys, Fractile, and Aragon, are raising funds. Meanwhile, EU-based firms like Alexera AI and Olix have already secured investments this year.
Funding Gap and Market Challenges Remain in Europe
European AI chip startups are facing several funding and market challenges despite growing global interest in artificial intelligence hardware. This situation is largely due to Europe having a less developed semiconductor manufacturing ecosystem than in regions like the U.S. and parts of Asia, where advanced chip production is more established.
In terms of funding, European private companies in the AI chip sector have raised about $800 million so far in 2026, significantly lower than the estimated $4.7 billion raised by their U.S. counterparts. For instance, the U.S.-based company Cerebras Systems has raised up to $1 billion in funding, highlighting a substantial gap in available venture capital between the two markets.
Additionally, the market is highly influenced by geopolitical factors. For example, the U.S. has tightened export controls on advanced AI chips and related technologies. As a result, this has encouraged European companies to develop their domestic technologies and reduce their reliance on foreign suppliers.
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