AI Chip Startup Etched Fields Funding Offers at $40B+ Valuation
AI hardware startup Etched is reviewing fresh investment offers valuing the company at $40 billion to $50 billion, more than double its September valuation. The talks remain early-stage, and the company declined to comment.
Etched, a startup building AI chips and full hardware systems, is drawing investor interest at roughly double or more its recent valuation, according to people familiar with the matter. The company is reportedly weighing offers ranging from $40 billion from top-tier investors to $50 billion from lesser-known backers. These discussions are still in early stages, meaning any eventual deal terms could change. Etched declined to comment on the matter.
A history of rapid raises
Just two months ago, in September, Etched closed a $700 million round at a $21 billion valuation, led by quantitative trading firm Jane Street, which is also a customer using an early version of the company's system. That followed a $300 million round in July at a $10.3 billion valuation led by Sequoia. A person familiar with the current talks said that if Etched raises an amount similar to its last round, it could extend the company's runway by as much as 3.5 years.
Why investors are interested
Etched focuses on building hardware optimized for inference, the computing that happens after a user submits a prompt to an AI system. Co-founder and COO Robert Wachen has said the company engineered two entirely new components to accelerate this process, claiming its chips process more tokens faster and at lower cost than Nvidia's offerings. That edge has made the technology especially attractive to Jane Street, where even marginal speed gains can translate into significant financial returns.
In July, Etched said it had already secured $1 billion in customer orders after manufacturing a test chip at a TSMC facility. The company has also drawn notice for recruiting talent from Nvidia, with about 15% of its roughly 400 employees having previously worked there. Etched operates a 10-megawatt data center in Silicon Valley and has set up a facility in Taiwan to coordinate production near TSMC. The company was founded by Gavin Uberti and Chris Zhu, who met in an advanced math course at Harvard, along with Wachen, Uberti's former roommate, who all left school to build the company.
