IIT Madras alumni-led Discovered Materials raises $9 million for semiconductor chip materials

AI materials startup Discovered Materials has raised $9 million (about Rs 85 crore) in seed funding as it seeks to speed up the development of new materials for semiconductor chips.

The funding round was led by Lightspeed, with participation from Y Combinator and Peak XV Partners. Angel investors including Paul Graham, Gokul Rajaram and Thariq Shihipar also took part.

The San Francisco-based startup said it will use the money to expand its team and laboratory and scale the AI agents it uses for materials research.

Discovered Materials was founded in 2026 by Advaith Sridhar and Akash Ramdas, who met more than a decade ago while studying at IIT Madras. Ramdas has a PhD in materials science from Stanford University and has spent 11 years researching materials for semiconductor chips. Sridhar studied AI at Carnegie Mellon University and previously worked on AI models and agents at Persona AI and Luma Labs.

The startup is initially focusing on the growing challenge of managing heat in chips used for AI.

Discovered Materials said today's graphics processing units, or GPUs, have to handle heat fluxes of about 140 watts per square centimetre, with the thermal demands increasing as chips become more powerful. The materials used in a chip can affect both the heat it produces and how efficiently that heat can be dissipated.

The deeptech startup is searching for thermally conductive dielectric materials that could help make 3D chip architectures more practical. Such designs place components including memory and logic closer together, but their increased density creates additional challenges in removing heat.

Discovered Materials uses AI agents to propose potential materials and synthesis methods before assessing candidates with computational tools and physics-based simulations. These evaluations examine factors including stability, thermal conductivity and dielectric properties before promising candidates can move towards laboratory testing.

It said that during its three-month Y Combinator programme it simulated, synthesised and tested thermal interface materials that matched the performance of products developed over several years by major chemicals companies. 

“New materials are how we close that gap,” Ramdas said, referring to the difference in power efficiency between today's chips and the human brain.

Alongside the funding announcement, the startup released Material Discovery Bench, an open-source benchmark intended to test how frontier AI models perform on real-world semiconductor materials problems.

According to the startup, models tested using the benchmark identified more than 500 previously unknown computational material candidates with promising properties. However, finding a candidate in simulation does not mean it can necessarily be manufactured or used commercially, and proposed materials still have to undergo synthesis and experimental validation.

That gap between computational discovery and manufacturing remains a significant part of the challenge. 

If the startup identifies commercially useful materials, it plans to seek patents covering their use in GPUs or manufacturing processes and license the resulting intellectual property to chipmakers.