Tissue cryptographyA hardware startup created by MIT and Stanford dropouts (and a married couple) Michael Gao and Tina Ju, want modern cryptographic techniques such as zero-knowledge proofs (which allow you to prove things without revealing exactly what you know) and fully homomorphic encryption (which allows you to work with encrypted data without decrypting it) to become ubiquitous. This, the cofounders argue, will ease what they see as a fundamental tension between trust and privacy in an era when companies collect ever-increasing amounts of data about consumers but are also increasingly unable to protect it.
To demonstrate this, the team has developed a custom RISC-V-based chip that is optimized to run the algorithms needed to establish zero-knowledge proofs and enable fully homomorphic encryption. Fabric calls it a “verifiable processing unit” (VPU). The team claims that existing hardware is simply too slow to make things like fully homomorphic encryption ubiquitous, so custom chips are needed to achieve this.
Several VCs are also backing the idea, with Blockchain Capital and 1kx leading the company’s $33 million Series A round. Offchain Labs, Polygon, and Matter Labs also participated. It follows a $6 million seed round led by Metaplanet with participation from the likes of Inflection and Liquid2 Ventures.
The fact that there are several crypto investors here who invest in crypto is no coincidence. “We couldn’t be more excited to partner with Fabric on their mission to accelerate all crypto operations with the world’s first VPU to help achieve a world where privacy and verifiability are non-negotiable components of all digital systems,” said Yuan Han Li, an investor at Blockchain Capital.
While Fabric has its sights set on enterprises, the market with the most immediate need for its solution is the blockchain space, which is also why its first-generation chip will focus on zero-knowledge proofs.
“With zero-knowledge proofs and fully homomorphic encryption, it’s really starting to look like AI from the 2010s, with the demand for computation increasing exponentially,” Gao told me. “You can say that even though not everyone understands what it is, it’s already increasing in ubiquity within the crypto space. And we think it’s going beyond cryptography. It’s heading to widespread cryptography in the enterprise. And so we realized that this is really a mainstream moment, and hardware could be the final accelerator that pushes it over the edge and allows cryptographers to realize their dreams. That’s why Tina and I partnered up and started this company.”
Fabric says it has already received “tens of millions of dollars in pre-orders.”
Companies also don’t want to deal with “the toxic sludge of user data,” Ju noted, because most of it is a burden. So if they can keep that data encrypted, even while it’s in use, or not even have to obtain it and instead exchange only what’s necessary through zero-knowledge proofs, that’s a big win for them.
Gao is no stranger to ambitious hardware startups. He previously co-founded photonic AI startup Luminous Computing. He then also co-founded Bitcoin mining chip startup Katana in 2021 and took over as CEO in 2022. Katana changed its name to Fabric Systems. Fabric Systems no longer exists, but some of its DNA appears to live on in Fabric Cryptography.
The pair’s experience at Luminous, however, may have been something of a wake-up call. “We were both disillusioned because, despite my personal enthusiasm for large language models and despite the enormous potential of AI in general… the most practical go-to-market for photonic computing seemed to be giant AI machines for targeted ads on social media — a use case that barely got me out of bed in the morning,” Gao said.
Fabric is about to launch its first chips, and the company plans to use this new funding to develop the next generation of its chips and expand its software and cryptography teams. Longer term, Fabric hopes to introduce its chips into enterprise data centers and perhaps even sell them to hyperscale clouds.