Etched: AI Chip Startup Doubles Valuation in One Month
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According to TechCrunch, US-based AI chip startup Etched has raised $700 million in a new funding round at a valuation of $21 billion. The valuation jump is enormous — the young company was still valued at just $5 billion back in January.
Valuation multiplied since January
This latest funding is already the second round in a short period of time. In July, the startup raised $300 million in a Series C at a valuation of $10.3 billion. Now investors have doubled the valuation to $21 billion within a single month — a gain of nearly $11 billion.
The round was led by Jane Street, after the renowned quant fund tested and purchased the startup’s AI hardware. Etched is frequently regarded as a rival to Nvidia. Founded in 2022, the company delivers its AI technology as complete systems, similar to Nvidia’s AI Factories.
Etched accelerates inference on prompts
Co-founder and COO Robert Wachen told TechCrunch that investors are so enthusiastic because Etched has developed two new components from scratch to accelerate inference — the computational process that runs after users enter prompts.
“Inference consists of two phases,” said Wachen, “Prefill and Decode.” In the mathematically and computationally intensive Prefill phase, the system must understand the prompt including its context. In the memory-intensive Decode phase, the system generates output tokens — the actual response that users see.
Etched has developed a Prefill chip that operates at low voltage, allowing it to integrate more transistors while avoiding the typical heat issues found in other high-end AI chips. This enables faster processing of more tokens. For the Decode process, Etched has also developed a new memory type and an interconnect that the startup calls Cluster-Scale Memory.
Prominent investors on board
“It allows many chips to connect and share a common memory pool with very, very fast, low latency,” said Wachen. The result, Etched promises, is higher speeds and lower costs.
In the blog post announcing the new round, investment firm Jane Street stated: “We tested the chip and are satisfied with the early results. Etched’s unique approach to inference delivers the precision we will need to support our most demanding workloads. We are excited to now be running our own rack in our data center.”
Other investors in Etched include Kleiner Perkins, Sequoia Capital, Andreessen Horowitz, Peter Thiel, Tiger Global, Bain Capital Ventures, Neo, Stripes, Primary, Positive Sum, Diffusion, Argo, and Blackstone.
