Former Google, Meta executives raise $100 million for high-capacity AI servers startup
Ofer Shacham is CEO of Majestic Labs.
Tal Givony
Three former Meta and Google silicon executives on Monday announced they’ve raised a total of $100 million to build technology they say will reduce cloud companies’ spend on data center buildouts.
Called Majestic Labs, the startup’s co-founders are Ofer Shacham, Sha Rabii and Masumi Reynders, all of whom spent years working together leading silicon products at Meta and Google. Majestic’s patent-pending silicon design architecture includes 1,000 times the memory of a typical enterprise-grade server, the co-founders told CNBC.
Majestic develops its entire chip system, much like Nvidia, but each of the startup’s servers may replace up to 10 of today’s leading racks, they said.
The company closed its $71 million Series A funding round in September, led by Bow Wave Capital. Among its others investors is Lux Capital. Prior to Monday’s announcement, the co-founders had been quietly working on the startup since late 2023.
Majestic’s funding announcement comes as major tech companies raise their capital expenditures, primarily for data center infrastructure. Alphabet, Meta, Microsoft and Amazon each lifted their guidance for capital expenditures in October, and they collectively expect that number to reach more than $380 billion this year.
While the majority of large language models and AI workloads have relied on Nvidia’s graphics processing units, or GPUs, more companies are entering the fold. Google last week announced Ironwood, its latest tensor processing unit, or TPUs, which artificial intelligence startup Anthropic plans to use for its Claude model.
Sha Rabii is Majestic Labs President. Rabii used to lead Google’s silicon efforts.
However, memory capacity remains a challenge for companies that have large amounts of data to process, which the Majestic co-founders said they hope to address.
“Nvidia makes excellent GPUs and has driven incredible AI innovation,” Shacham, Majestic’s CEO, told CNBC. “We’re not trying to replace GPUs across the board — we’re solving for memory-intensive AI workloads where the fixed compute-to-memory ratio becomes a constraint”
Majestic is going after hyperscalers and large companies that run AI models, including those from the financial and pharmaceutical industries, the co-founders said.
The technology underpinning the company includes patent-pending architectures that allow Majestic to collapse multiple racks worth of conventional equipment and memory into a single server. Majestic claims that will allow for a smaller footprint and requires less power and cooling, helping the company’s clients reduce their data center costs.
Prototypes of Majestic’s box servers will be available for some customers in 2027, and the startup has already begun discussing pre-orders, the co-founders said. Majestic declined to share its clients.
The company has fewer than 50 employees — half of which are based in Tel Aviv, Israel, while the rest are based in Los Altos, California. Majestic said it plans to grow each location and seek additional funding in the coming year.
Always in the periphery
The trio met at Google, and together, they helped stand up the team working on Google’s TPUs.
“We’d been building AI for DARPA, for Google, for Meta, but suddenly AI became this ubiquitous thing that everybody needs,” Shacham said. “Every large company needs AI, and that was a good time for me to say ‘How about we go and do that?'”
The first to join the search company was Reynders in 2003, who went to Google as a senior corporate counsel. She’s now Majestic’s COO and manages the business side of the company.
At Google, her teams were focused on business development and product strategy focused on silicon. Reynders spent 15 years at Google, where she rose to director of product management and silicon.
Rabii, Majestic’s president, earned his doctorate from Stanford University, and in 2011, he sold his last chip design company, Arda Technologies, to Google, where he rose to senior director of engineering. Under Rabii, Google launched its video chip Argos, which is used in YouTube’s data centers.
Shacham sold his company, Chip Genesis, to Google in August 2013, when Rabii was leading Google’s silicon team. Chip Genesis’s technology was used broadly across many products including the AI accelerators in Google’s Pixel smartphones. At Google, Shacham rose to head of silicon design and implementation for consumer hardware.
Majestic Labs chief operating officer and co-founder Masumi Reynders
Sharyce Rains
The three of them left Google in 2018 for the company then known as Facebook. There, they built the Facebook Agile Silicon Team, known as “FAST,” within the company’s Reality Labs hardware division. Shacham rose to vice president and head of FAST.
When Meta laid off employees from Reality Labs in 2023, Shacham had to conduct the cuts, he said. At that point, Meta was trying to conserve cash, he said.
“Part of that was layoffs across the organization, and FAST was not excluded from that,” Shacham said. “It’s not a good place to be, not a good feeling to do.”
The three founded Majestic Labs after brainstorming about the biggest bottleneck problems for silicon and AI.
“We’ve been friends and colleagues for a long time, so this notion of working together and doing something exciting has always been in the periphery,” Reynders said.
As Majestic eyes growth and hiring in 2026, the co-founders said they’re tapping into their collective of rolodex of the more than 1,500 employees they’ve worked with at prior companies, including Meta and Google.
“There’s that trust they already have with us,” Rabii said of the former colleagues.
U.S. artificial intelligence names were in negative territory in premarket trading on Friday, extending losses into their third day.
Oracle was 0.9% lower in premarket trading, paring earlier losses which saw it fall 1.3%. Nvidia shed 0.7%, Micron fell 0.9%, and CoreWeave was down 1.3% at 5:16 a.m. ET.
Broadcom, which reported a strong quarter on Thursday, was last seen down 5%.
The share price of cloud computing and database software maker Oracle plummeted on Thursday, ending the session around 11% lighter after revenue earnings missed analyst expectations on Wednesday.
It dragged other AI-related names down with it despite a record-breaking rally elsewhere on Wall Street, suggesting investors are rotating out of tech into other parts of the market.
The tech-heavy Nasdaq Composite fell 0.26% on Thursday, despite the Dow Jones Industrial Average and S&P 500 hitting fresh records at the end of the session.
Despite booming demand for Oracle’s artificial intelligence infrastructure, it posted mixed results this week. Revenue came in at $16.06 billion, compared with $16.21 billion expected by analysts, according to data compiled by LSEG.
It followed widespread speculation around the long-term health of the company, with investors cautious about its reliance on debt to execute its AI infrastructure build-out. The broader industry’s circular dealmaking has also raised eyebrows.
“We think recent investor scrutiny on artificial intelligence’s potential and circular GPU deals can be overly punitive to key AI suppliers like Oracle,” said Morningstar Equity Analyst Luke Yang. “Oracle remains a respectable cloud provider that enjoys strong switching costs across its database, application, and infrastructure lineup.”
That said, the firm reduced its fair value estimate for wide-moat Oracle to $286 per share, down from $340. Morningstar’s moat rating refers to its assessment of a company’s durable competitive advantage.
“We lowered our long-term earnings outlook as delivering Oracle’s planned capacity on time now proved to be a harder task. However, we continue to view shares as undervalued,” Yang added.
Technology
Reddit challenges Australia’s under-16 social media ban in High Court filing, says law curbs political speech
-
Sports2 years agoStory injured on diving stop, exits Red Sox game
-
Sports3 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports2 years agoGame 1 of WS least-watched in recorded history
-
Sports3 years agoButton battles heat exhaustion in NASCAR debut
-
Sports3 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment3 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment1 year agoHere are the best electric bikes you can buy at every price level in October 2024