Unconventional AI buys Israeli chip startup NeuReality to move from research to finished products

Unconventional AI said on October 26 that it is buying Israeli chip startup NeuReality in a cash-and-stock deal for an undisclosed sum. Reuters reported that the US startup, launched less than a year ago, carries a $4.5 billion valuation and had previously raised $475 million.

What it is buying

NeuReality was founded in 2019 by Moshe Tanach, formerly of Marvell Technology and Intel, Tzvika Shmueli and Yossi Kasus, and had already developed several advanced AI chips. About 40 people will join Unconventional AI as part of the deal, and the company will maintain a presence in Israel; chief executive Naveen Rao also sits on NeuReality's board.

Why buy now

Rao told Reuters the company had expected to take three years in research and development and five years to develop a product, but work moved much faster than anticipated with the help of AI tools: its first test chip is already built and a second is nearing completion. The company has built up its research base, he said, and now needs an engineering team that can execute, build products and scale them.

The company's approach

Mountain View, California-based Unconventional AI aims to develop AI chips that are 1,000 times more energy efficient than current offerings, using concepts from biological systems. Rao calls the approach a dynamical systems method, in which simple computing elements interact under simple rules and evolve over time to reach a result, rather than following programmed step-by-step logic as conventional chips do. Rao previously sold chip startup Nervana to Intel for more than $400 million and AI software startup MosaicML to Databricks for $1.3 billion; Unconventional AI's backers include Andreessen Horowitz and Sequoia, along with Amazon founder Jeff Bezos.

Source: Reuters, October 26, 2026.