AI chip start-up Etched raises $700m at $21bn valuation

AI hardware startup Etched has secured $700 million in funding at a valuation of $21 billion, nearly doubling its value in just one month. Founded in 2022 by Gavin Uberti, Robert Wachen, and Chris Zhu, Etched emerged from stealth in June and has quickly gained traction in the AI chip market. The company's primary focus is on creating faster, cheaper, and more efficient inference clusters, which process AI models to generate predictions on new data.

Etched achieves this through two key technologies: low voltage inference, which increases compute density while using the same power as existing hardware, and cluster scale memory, a hybrid memory subsystem that creates a large shared memory pool across an entire cluster. Jane Street, a US trading firm, is Etched's first customer and has also led the funding round.

The startup has secured contracts with over $1 billion in value from a range of industries, including frontier AI companies and cloud providers. Etched's team currently numbers 400 employees and was previously led by Sequoia Capital, who led a $300 million Series C round last month. The company is challenging Nvidia's dominance in the AI chip market and has reportedly hired 15% of its current staff from the tech giant, according to the Wall Street Journal.

With the demand for semiconductors reaching unprecedented levels, Etched is aiming to address the challenges of building new factories, global supply chains, fleet software, and self-improving kernel agents to scale intelligence.