Qualcomm-backed firm launches latest AI chips — posing a challenge to giants like Nvidia

Kneron, an artificial intelligence chip startup, launched its next-generation products on Wednesday as it looks to cash in on AI interest from businesses and offer an alternative to giants like Nvidia and AMD.

The Taiwanese firm, which is backed by U.S. chip giant Qualcomm and iPhone assembler Foxconn, took the wraps off the KNEO 330, its second-generation "edge GPT" server.

GPT, or generative pre-trained transformer, refers to AI algorithms trained on huge amounts of data that are able to produce text and images. Examples include OpenAI's ChatGPT.

However, many of the companies wishing to use generative AI functions and apps today rely on giants like Microsoft and Amazon through their cloud businesses. These so-called "hyperscalers" are buying huge amounts of chips from companies like Nvidia to train up these massive AI models in data centers running complex servers.

Kneron is betting that businesses will not always want to rely on these cloud giants for their AI needs.

Instead, KNEO 330 is aimed at businesses wishing to run their own AI applications from their own premises rather than relying on servers located elsewhere and owned by one of the big cloud players.

"We find a strong market need in big high-tech companies, or medical centers or financial institutions, they care about their privacy," Albert Liu, CEO of Kneron, told CNBC ahead of the product launch. "They don't want to upload that to OpenAI."

Liu believes that businesses might not want to give their data over to a third-party to use their AI tools. Instead, with Kneron's technology, companies can build their own AI applications using the company's servers located on-premise at a business.

Kneron's launch comes just days after both Nvidia and AMD launched their