AI chip startup Etched's valuation doubles to $21B in a single month
Chip startup Etched has raised $700 million in a new funding round led by Jane Street, pushing its valuation to $21 billion just a month after its previous round valued it at $10.3 billion.
AI chip startup Etched announced on Tuesday that it has raised $700 million in a new funding round, reaching a $21 billion valuation. The round was led by quantitative trading firm Jane Street, which tested and purchased the startup's AI hardware before investing.
The pace of the valuation increase stands out even against the broader AI industry's rapid growth. Etched was valued at $5 billion in December, raised a $300 million Series C at a $10.3 billion valuation in July, and has now nearly doubled that figure to $21 billion in under a month — an increase of almost $11 billion.
Two new components built to speed up inference
Etched delivers its technology as complete systems it calls "frontier inference clusters" (rival Nvidia calls its comparable systems "AI factories"). Co-founder and COO Robert Wachen said investor enthusiasm stems from two components the company designed from scratch to accelerate inference — the computing process that happens after a user submits a prompt.
Inference happens in two stages: prefill and decode. The prefill phase, which involves understanding the prompt and its context, is mathematically and computationally intensive. The decode phase, which generates the output tokens shown to the user, is memory-intensive instead.
Etched built a prefill chip that runs at low voltage, allowing it to pack in more transistors without the heat issues typical of other high-end AI chips, enabling faster processing of more tokens. For the decode phase, the company created a new type of memory and interconnect it calls cluster-scale memory, which lets many chips connect and share a memory pool with very low latency.
Etched is still working to shed an early misconception that each of its chips is custom-built to run one specific frontier model. That was the original plan, but it's no longer how the technology works — Etched's systems can now run any frontier model.
Etched's investor roster includes Kleiner Perkins, Sequoia Capital, Andreessen Horowitz, Peter Thiel, Tiger Global, Bain Capital Ventures and several other firms.
