SAN FRANCISCO, California: Six-month-old chip startup Nuvacore is seeking hundreds of millions of dollars in funding at a valuation of roughly $2.5 billion, despite not yet having a product, according to two people familiar with the fundraising.

The Sequoia Capital-backed company is developing a new central processor designed for data centers as demand for computing capacity to power artificial intelligence applications grows.

The roughly $2.5 billion valuation has not previously been reported. The Information previously reported that Nuvacore was seeking to raise $200 million or more.

The funding round has not closed, and both the valuation and amount of capital being raised could change, the people said.

Central processing units perform important functions as traffic controllers for Nvidia's AI chips and run autonomous AI software known as agents. Demand for CPUs has increased alongside the computing requirements of chatbots such as Anthropic's Claude.

Intel and Advanced Micro Devices, which use x86 technology, have long dominated the data center CPU market. Companies designing chips based on Arm technology, which is used in custom CPUs from Amazon and Microsoft, have also sought to gain ground in the market.

Nuvacore has not yet developed a product. Last month, the company outlined an unconventional strategy of developing the chip's core functionality before choosing an architecture such as x86 or Arm.

Nuvacore said the approach would allow its engineers to avoid the limitations and requirements of particular architectures and optimize the design for computations commonly used in data centers and AI infrastructure.

The company declined to comment.

Based in San Jose, California, Nuvacore was founded by engineers Gerard Williams, John Bruno and Ram Srinivasan. Williams, a former Apple executive, previously founded Nuvia, which was sold to Qualcomm for $1.4 billion in 2021.

Nuvacore announced a seed funding round led by Sequoia Capital earlier this year. It is among a series of young chip startups seeking billion-dollar valuations before releasing products as investor interest in AI hardware companies returns.

Silicon Valley venture capital firms had shown less interest in hardware than software over the past decade because hardware typically requires longer development cycles and more capital and is exposed to cyclical demand.

Investors put about $10.7 billion into semiconductor startups during the first five months of 2026, already approaching the $12.2 billion raised globally throughout 2025, according to Crunchbase data.

Demand has also been evident among established chipmakers. Intel said earlier this year that it could not manufacture enough chips to meet demand, while AMD has reported rising CPU sales. Shares of both companies have climbed more than 180% this year.

Nvidia launched its Vera CPU this year. CEO Jensen Huang has said the company expects to sell $20 billion worth of Vera CPUs in its fiscal year ending in January.