Tether Backs Tenstorrent in $1.5 Billion AI Hardware Expansion

The financing round, led by Trace Capital and Innovation X, includes major institutional players such as Fidelity, Morgan Stanley, and ARK Invest. While Tether did not disclose the specific capital commitment or its resulting ownership percentage, the company characterized the move as a deployment of excess reserves aimed at fostering AI systems that businesses can operate independently of major cloud providers.

Tenstorrent, led by industry veteran Jim Keller, plans to utilize the capital to scale production of its Galaxy servers and accelerate the development of its TT-Ascalon CPU and Tensix AI core technology. The company advocates for an open-source software stack that allows clients—including partners like LG and Samsung—to run large language models locally. This alignment with decentralized computing mirrors Tether CEO Paolo Ardoino’s stated preference for AI infrastructure that users can control without reliance on proprietary, centralized platforms.

Beyond hardware, Tether’s recent aggressive expansion into the AI sector includes a seed extension for the agent-payment platform AIsa and the release of QVAC TranscribePsy, an offline speech recognition model. These moves follow a period of significant growth for the issuer, which reported $1.5 billion in profit for the second quarter and an excess reserve buffer of over $4 billion as of mid-2025. The Tenstorrent investment represents a shift from traditional liquidity management toward direct equity participation in the physical infrastructure powering global artificial intelligence.