Unconventional AI, the Mountain View chip startup led by Naveen Rao, has agreed to acquire NeuReality, an Israeli company that builds chips and systems for running trained AI models. The deal was announced on October 26, 2026, and reported by CTech and by Reuters.
Financial terms were not disclosed. CTech reported that NeuReality's shareholders will receive cash and shares in Unconventional, and that the return is expected to exceed the roughly $105 million NeuReality raised. Both companies' boards have approved the deal, which is expected to close in the fourth quarter of 2026.
About 40 people will join Unconventional, Reuters reported, including NeuReality's founders and founding team. CTech said NeuReality's engineering presence in Israel is expected to remain in place.
What NeuReality built
NeuReality was founded in 2019 by Moshe Tanach, Zvika Shmueli and Yossi Kasus. It works on AI inference, the stage at which a trained model is put to work answering requests, and designs both the silicon and the surrounding systems for it.
The company's focus has been on the bottlenecks around the processor rather than the processor alone: moving data in and out and orchestrating work across a system, which CTech described as the main targets of its technology.
Geektime reported that NeuReality's product is a server-side chip for running deep learning models in data centres, which it calls a network addressable processing unit, and that it is used for computer vision, language processing and recommendation engines. The company has worked with Samsung, Lenovo, IBM and AMD, and built a prototype with AMD, according to Geektime.
Tanach said the company was set up on the premise that the cost of running AI models was too high. "We built NeuReality because we believed the economics of AI inference were fundamentally broken," he said, according to CTech.
“The hardest thing in this industry is assembling a team that can build real silicon and the systems around it”
The funding
NeuReality raised about $105 million, CTech reported. Its investors include chip designer Arm, Samsung Ventures, Varana Capital, Cleveland Avenue and the crowdfunding platform OurCrowd.
The founders came out of Israel's chip industry. Tanach, the chief executive, was an engineering manager at Marvell and Intel and head of research and development at DesignArt, which Qualcomm bought in 2012. Shmueli worked at Mellanox and at Habana Labs, the AI chip company Intel acquired in 2019, and Kasus was a senior engineering director at Mellanox and led chip development at EZchip, Geektime reported. PitchBook data cited by Geektime puts NeuReality's total funding slightly higher, at about $115 million.
The company did not report its headcount beyond the roughly 40 employees who are moving to Unconventional, and neither side has said what will happen to NeuReality's existing products or customers.
Why Unconventional AI is buying
Unconventional came out of stealth in December 2025 with a $475 million seed round at a $4.5 billion valuation, co-led by Andreessen Horowitz and Lightspeed, with Sequoia, Lux Capital, DCVC and Jeff Bezos also investing, according to CTech. The company has said it is aiming for a 1,000-fold improvement in the efficiency of AI computing, a goal it has not yet demonstrated.
Rao told Reuters that the company had used AI tools to speed up its own research, which produced a first test chip sooner than expected, and that a second is close to completion. That shifted its needs from research to building products. "Things have gone a lot faster than anticipated," he said. "We need people who can go execute and build products and scale them."
"The hardest thing in this industry is assembling a team that can build real silicon and the systems around it," Rao said, according to CTech.
Rao knows NeuReality well: he previously sat on its board, Reuters reported. Tanach told Geektime that Rao proposed the deal about two months ago, and that NeuReality will become Unconventional's research and development centre in Israel, which Tanach will lead, reporting directly to Rao.
A founder with two exits
Rao has sold two companies before. He co-founded Nervana Systems, which Intel bought, and MosaicML, which Databricks acquired in 2023. He then led AI at Databricks before starting Unconventional, CTech reported.
The NeuReality deal is an early acquisition for a company that is about a year old. Because part of the price is paid in Unconventional shares, NeuReality's backers will end up holding a stake in the buyer.
For Israel's chip industry, the deal adds another local design team to a US company. Unconventional will keep a presence in the country, Reuters reported.
