Rain Neuromorphics Faces Security Concerns and Investment Issues
High-Profile Talks and Funding
Rain Neuromorphics, a startup specializing in AI hardware, claimed to investors that it had held advanced discussions with major tech companies such as Google, Oracle, Meta, Microsoft, and Amazon. Microsoft declined to comment on the matter, while no responses were received from the other companies.
The company’s funding round, led by Prosperity7, was announced in the previous year and brought Rain’s total funding to $33 million as of April 2022. The funding was enough to sustain the company through early 2025 and valued it at $90 million, excluding the new cash raised.
Investment By Prosperity7 and CFIUS Concerns
Prosperity7’s investment in Rain attracted the attention of the Committee on Foreign Investment in the United States (CFIUS), a government committee with the power to block deals that pose a threat to national security. CFIUS has been particularly concerned about China gaining access to advanced US semiconductors and using intermediaries in the Middle East to acquire critical technology.
Rain faced scrutiny due to a investment from Saudi Arabia, as it could potentially allow the country’s government access and control over Rain’s operations. CFIUS is committed to taking necessary actions within its authority to safeguard U.S. national security and the committee has worked out safeguards in other cases, but in this particular instance, it required full divestment from Rain.
OpenAI’s Quest for Deep-Pocketed Backers
Rain’s connection to OpenAI has brought to light the need for OpenAI to find partners with deep-pocketed backers to gain control over its hardware needs. Competitors such as Amazon and Google have invested in developing their own custom chips for AI projects, funding them with revenue from their core businesses.
Overall, Rain Neuromorphics’ interactions with high-profile tech companies, funding from international sources, and its association with OpenAI have raised significant concerns about national security and technology access, bringing it under the government’s scrutiny.
