As the network industry investigates Blockchains, homomorphic encryption, and other techniques for cryptography to boost data security and advanced computation to the next stage, a major obstacle to getting these being effective and working on a large scale is the power required to use these systems. In present, one of the startups believing it can solve this issue has emerged from stealth with an impressive amount of capital to enter the business.
Chain Reaction, an Israeli startup that is developing semiconductors and other related infrastructure for use in privacy and blockchain hardware that runs cryptographic processes has concluded a $70 million round and a Series C which raises the total amount raised by the company although it’s in stealth mode up to $115 million. The company has not yet announced a value, but we do know that it’s close to $500 million.
The round is led by Morgan Creek Digital, with Hanaco Ventures, Jerusalem Venture Partners, KCK Capital, Exor, Atreides Management, and Blue Run Ventures also participating.
The money will be used to expand the team which currently comprises 100 employees at the start-up that includes alumni of Nvidia, Mellanox, Israeli intel, and TSMC -and also to get its first products to the market in during the period (Q1 2023). The products include, according to the company, Application Specific Integrated Circuits (ASICs) and systems that are related and solutions for cloud-based data infrastructures that utilize privacy-enhancing technology (as some techniques for cryptographic security are described) The idea is that Chain Reaction’s technology will cut down on electricity usage and accelerate computation due to the fact that the design is optimized for cryptographic calculations, making it more efficient.
Chain Reaction currently works with TSMC as its sole Foundry partner, and has no plans to undertake the work by itself.
A semiconductor company that is aiming at the most advanced (and some might claim that they’re not yet battle-tested computing technology is an opportunity to make a splash, the history of this particular company de-risks this idea. The co-founders of the company are the CEO Alon Webman and Chief Technology Officer Oren Yokev. They are co-founders of Mellanox (which Nvidia acquired for more than $7 billion following the bidding war with Intel) as well as a long-time director of first cyber and later all technology in the office of and the Israeli prime minister.
Chain Reaction has been building in a stealthy manner for about six years. Webman (perhaps one of the more perfect names ever used by a tech businessman) says that the initial motivation behind the company was to develop privacy-related software — and specifically, to create processors that would help with the processing of encryption techniques that are related to privacy.
Homomorphic encryption is a method of protecting data and privacy that requires encryption of data from beginning to end, and all through the procedure of how it’s used — was witnessing some significant advances in the field of academics however the nagging issues of how to use it, as well as the computing power needed for it was already creating significant hurdles.
From the processing perspective, Webman and Yokev were able to see that this was an opportunity to create to solve the problem, and if they could do it, it would be a success. “We could become the next Nvidia,” Webman declared during an interview. In the process of developing stealth, they were invited by people working in blockchain technology, who were observing their own computational roadblocks for instance, in mining the cryptocurrency that is recognized as a power and computational resource hog.
Because of this data centers and other organizations creating mining hardware, intriguingly, became ChainReaction’s first customers (and likely the source of the name). While today Chain Reaction describes itself as a company that is focused on both areas, Webman said that while “privacy is the long play,” it’s the privacy-related applications, and computing done via cloud computing is the opportunity that has the greatest market potential and the longest-lasting impact on the business.
“We think our solution will make homomorphic encryption viable,” said the researcher. “We have a unique design and we are aware of the limitations of computing and memory in processors of currently. We have the solution to enable it.”
Chain Reaction’s rise highlights an intriguing arc in the field of semiconductors. Over the past two decades, but particularly within the last decade or more, there’s been a flurry of startups in the field that are building what is believed to be future-proofing chips will be required: to facilitate complicated algorithmic calculations to support artificial intelligence, which can be applied to many sectors and applications.
Webman believes it is possible that Chain Reaction is actually an indication of what could determine the design of chips following cryptographic computations.
“AI brought the last wave of semiconductor companies to market because they provided the acceleration and scale AI needed,” He declared. “The same is true for AI. We could be the first to adopt this technology, but we believe this will be one of the most disruptive technologies to be found in the cloud. You will find others. I’m sure that there are going to be.”
“We fully expect Chain Reaction’s blockchain products will become the new industry standard in blockchain compute infrastructure, laying the foundation for all future sustainable blockchain technologies,” said Mark Yusko, CEO and CIO of Morgan Creek Capital Management and managing partner of Morgan Creek Digital, in an announcement. “Blockchain is the most important factor in safeguarding democracy, decentralization and freedom, however, it’s computationally demanding. Chain Reaction’s products will build up the worth of prevalent blockchain technology and transform the use cases for blockchain technology in the near future.”
Pasha Romanovski, founding partner at Hanaco Ventures said: “Hanaco has believed in Chain Reaction from the get-go. We realized the possibilities of combining our experience and knowledge in system and analog design, with cryptography and algorithms to design the future of computing infrastructure. This is only the beginning of Chain Reaction, as they are making huge strides in disrupting the complex and traditional market of cloud, data center, and even cutting-edge computing’s hardware infrastructure.”