AI Chip Startup Etched Raises $700M, Doubling Valuation to $21B
Etched has raised $700 million at a $21 billion valuation, doubling its implied valuation less than a month after a $300 million Series C, as investors place large bets on specialized hardware for running advanced artificial-intelligence models.
Quantitative trading firm Jane Street led the round, joined by Kleiner Perkins, Sequoia, Andreessen Horowitz, Tiger Global, Bain Capital Ventures, Neo, Primary, Stripes, Positive Sum and Blackstone. Jane Street also became Etched’s first announced customer after receiving the company’s first operational server rack last month for deployment in its data center.
The San Jose, California-based company develops “frontier inference clusters,” integrated hardware, racks and software designed specifically to run AI models after they have been trained. Inference—the process of generating an answer, prediction or other output from a trained model—is becoming a major infrastructure cost as AI applications move from development into everyday use.
Etched says it has secured more than $1 billion in customer contracts across frontier AI companies and cloud providers. The company emerged from stealth in June with a working chip, a team of more than 400 employees and more than $1 billion in signed customer contracts. It said it achieved first-pass silicon success in under three years from seed funding, an important semiconductor milestone that means the initial manufactured chip performed as intended.
The new round follows Etched’s $300 million Series C in July, led by Sequoia at a $10.3 billion valuation. The company described that financing as Sequoia’s highest-valued Series C investment.
Etched’s systems are designed for mixture-of-experts, or MoE, models—AI architectures that activate only selected parts of a model for each task—as well as non-transformer designs. Its core technologies include Low Voltage Inference, intended to increase computing density within a given power budget, and Cluster Scale Memory, which pools memory across an entire cluster rather than limiting it to a single chip.
“Inference is becoming one of the most important infrastructure markets in AI, and the winners will be measured by tokens per dollar and per watt,” Kleiner Perkins Managing Partner Mamoon Hamid said.
Etched is entering a market dominated by Nvidia and contested by established semiconductor companies and startups including Cerebras, Groq and SambaNova.