Korean AI Chip Startups Face $1.5 Billion Valuation Amid Profit Challenges

Korean AI chip startups are entering 2026 with valuations soaring past $1.5 billion, despite ongoing profitability challenges. Companies like FuriosaAI and Rebellions are at the center of investor attention, as the global AI boom drives demand for alternatives to Nvidia’s dominance. However, these startups must now prove their technology can deliver on the hype, as losses continue to mount and investors grow more discerning.

The Race to Prove AI Chip Viability

FuriosaAI is preparing to mass-produce its second-generation inference chip, Renegade, in January 2026. The chip promises more than double the power efficiency of Nvidia’s L40S, with a third-generation chip already in development. This roadmap has bolstered investor confidence, but the company’s financials tell a different story. FuriosaAI reported just $2.5 million in revenue for 2024, with operating losses widening to $66.2 million. Similarly, Rebellions posted $8.8 million in sales but faced an $74.7 million operating loss.

Despite these losses, both companies have seen their valuations climb. FuriosaAI’s shares have traded at valuations between $1.3 billion and $1.4 billion, while Rebellions raised $289 million in September 2025 at a $1.6 billion valuation. Recent secondary transactions have maintained this valuation, even as some executives sold portions of their holdings.

Investor Faith in AI Chips

The optimism surrounding Korean AI chip startups reflects the broader market’s faith in the AI and semiconductor sectors. As demand for AI infrastructure grows, Korean-made AI semiconductors are increasingly viewed as strategic alternatives to Nvidia. This sentiment is echoed by a VC executive who noted that having AI and semiconductor in a pitch deck is no longer enough—companies must prove their technology works to secure funding.

Nota, an AI model optimization company that went public on KOSDAQ in November 2025, debuted with a market cap of around $146 million and is now nearing the $772 million mark. Similarly, Semifive, a global AI semiconductor design firm, has surged well above its IPO price and is now valued at roughly $700 million.

However, the numbers on paper highlight the disparity between valuation and financial performance. Venture capitalists see 2026 as a critical year for AI chip startups, as they must demonstrate whether their trillion-won valuations are justified or built on hope alone.

The combination of AI and semiconductors remains one of the strongest growth stories in the market, but the road ahead is fraught with challenges. As South Korea enters 2026, the mood surrounding its AI semiconductor startups is one of cautious optimism. These companies are still posting losses, yet their valuations in the private market are pushing past the $1.5 billion mark. Some investors are even floating numbers as high as $75 billion if everything goes right, underscoring the market’s faith in AI chips.