Etched AI Chip Startup Targets $20B Valuation

According to people familiar with the matter, AI chip startup Etched, which is developing processors to compete with Nvidia, is advancing a new funding round led by existing investor Jane Street Capital. The company’s valuation could triple to around $20 billion if the financing is completed.

Sources said that, driven by strong venture capital interest in artificial intelligence startups, the San Jose, California-based company is also pursuing a separate funding round led by Sequoia Capital, which would value the company at approximately $10 billion. Neither financing deal has been finalized, and the terms remain subject to change.

The AI investment landscape in Silicon Valley has remained highly active, with leading startups securing multiple high-value funding rounds in a short period. Companies with advanced AI technologies are gaining stronger negotiating power among investors. Etched is focused on developing dedicated AI inference chips, and its first chip design has reportedly entered the testing and validation stage. The company is said to have secured potential customer demand worth about $1 billion.

Founded in 2022 by three Harvard dropouts, Etched has attracted early investments from firms and individuals including Stripes, Peter Thiel, and Ribbit Capital. The startup aims to challenge Nvidia’s dominance in the AI accelerator market by designing specialized hardware optimized for AI inference workloads.

While Nvidia continues to lead the AI training chip market with its powerful GPU ecosystem, a growing number of startups are attempting to capture opportunities in AI inference computing. Companies such as Cerebras, Groq, Fractile, and SambaNova are developing dedicated AI chips, intensifying competition in the rapidly expanding AI semiconductor sector.