AI chip startup Etched doubles valuation to $21B in just one month
AI hardware startup Etched has raised $700 million at a $21 billion valuation in a round led by Jane Street. The valuation has doubled in just one month since its previous funding round.
AI hardware startup Etched announced on Tuesday that it has raised $700 million in fresh funding, pushing its valuation to $21 billion. The round was led by Jane Street, the well-known quantitative trading firm, which invested after testing and purchasing the startup's AI chips.
The pace of the valuation increase stands out even in a sector known for rapid growth. Etched was valued at $5 billion in December, then reached $10.3 billion in July after raising a $300 million Series C round. Just one month later, that figure has nearly doubled, rising by close to $11 billion.
Two custom components built to speed up inference
Etched delivers its technology as complete systems it calls "frontier inference clusters," a category competitor Nvidia refers to as "AI factories." Co-founder and COO Robert Wachen told TechCrunch that investor enthusiasm stems from two components the company built from scratch to accelerate inference, the computing process that occurs after a user submits a prompt.
Inference happens in two stages, according to Wachen: "prefill," where the system interprets the prompt and its context, and "decode," where it generates the output tokens that make up the final answer. Etched built a prefill chip that runs at low voltage, allowing it to pack in more transistors while avoiding the heat issues typically seen in high-end AI chips. For the decode stage, the company developed a new type of memory and interconnect it calls cluster-scale memory, letting many chips share a single memory pool with very low latency.
The startup is still working to shed an early misconception that its chips are custom-etched for a single AI model. While that was the original plan, Etched's systems can now run any frontier model.
In a blog post announcing the round, Jane Street said it tested the chip, was pleased with early results, and now has its own rack running in its data center. Etched's other backers include Kleiner Perkins, Sequoia Capital, Andreessen Horowitz, Peter Thiel, Tiger Global, Bain Capital Ventures, and several other investment firms.
