Nvidia rivals eye huge funding rounds as AI chip market booms

European chip startups developing alternative technology to Nvidia’s graphics processing units (GPUs) are eyeing big funding rounds as they look to scale amid the AI boom.

Dutch company Euclyd, backed by the former CEO of chipmaking equipment giant ASML, is currently in discussions with investors for a round of at least 100 million euros ($118 million), its founder Bernardo Kastrup, told CNBC in an exclusive interview.

Elsewhere, U.K. startup Optalysys is planning a $100 million plus fundraise later this year and British company Fractile and France’s Arago are reportedly fundraising for nine-figure rounds. Fractile declined to comment and Arago did not respond to a request for comment. So far in 2026, investors have already funnelled more than $200 million into the Netherlands’ Axelera and the U.K.’s Olix.

Nvidia has rapidly become the world’s most valuable company as its GPUs, originally designed for gaming, have been repurposed for training AI models, but eyes are now turning to the most efficient ways to use those models, known as AI inference.

While the U.S. chip giant is developing semiconductor systems for that purpose too, a crop of new European startups are emerging that claim the tech they’re building can do it more efficiently.

“Inference is dominant now, and the existing GPU architecture wasn’t built for it in ways that matter most at scale,” Patrick Schneider-Sikorsky, director at the Nato Innovation Fund (NIF), which has invested in Fractile, told CNBC.

“The geopolitical tailwinds are obvious with U.S. export controls, concentration risk around [chipmaker] TSMC and a genuine European sovereign compute imperative are all pushing capital toward homegrown silicon.”