AI chip startup Etched, a competitor to Nvidia, is reportedly aiming for a valuation of up to $20 billion in a new financing round. This comes shortly after the company publicly announced a prior funding round in December at a $5 billion post-money valuation, which raised $500 million.
In addition to the potential $20 billion valuation round, Etched is also said to be raising separate capital in a round led by Sequoia, valuing the company at $10 billion. The company has already secured significant investment, totaling $800 million to date, from major investors including VentureTech Alliance, Jane Street, Hudson River Trading, Two Sigma, Ribbit Capital, and Stripes. Angel investors include AI pioneers Andrej Karpathy, Geoffrey Hinton, and Fei-Fei Li, as well as billionaires Stanley Druckenmiller and Peter Thiel.
Etched has recently emerged from stealth, revealing that TSMC successfully manufactured its first chip. The company claims to have already secured $1 billion in contract orders for its "frontier inference clusters," which are full systems designed to run AI models faster, more cheaply, and with better power efficiency. These systems are currently being tested with customers, with shipments planned for this summer. Etched emphasizes its approach of building the entire server rack, including custom chips, circuit boards, and cooling systems, to compete at scale.
