Nigel Toon has spent almost three decades in the semiconductor industry, accumulating multiple patents and selling two start-ups, including one to Nvidia for about $400 million.
None of that mattered three years ago when Toon was trying to raise money for XMOS, a chipmaker for digital electronics.
Venture capitalists wouldn't touch silicon. Start-ups required too much capital to get off the ground and had a brutally high mortality rate. On the occasion when Toon's pitch excited a particular venture investor, the rest of the firm balked.
"They'd go to the partner meeting on Monday morning and the other partners would fall on the floor laughing," Toon said in a recent interview with CNBC. "They'd say, `You want to do what?' It was almost toxic."
Fast forward to 2017 and there's no more laughing.
Toon is now co-founder and CEO of Graphcore, which spun out of XMOS in mid-2016. The U.K.-based company is developing silicon for high-performance servers to run artificial intelligence workloads. It's playing right into one of the tech industry's hottest trends and reminding Silicon Valley where it got its name.
Semiconductor start-ups are poised to raise $1.6 billion this year, up from $1.3 billion in 2016 and $820 million in 2015, according to CB Insights. In particular, chipmakers targeting AI are seeing a surge of interest as investors see a massive math problem staring them in the face.