AI Chip Startup Etched Valuation Doubles to $21 Billion

According to the company, AI chip startup Etched announced on August 18 that it had raised $700 million in a new funding round, lifting its valuation to $21 billion. The valuation has more than doubled from the $10.3 billion recorded in its previous financing round less than a month ago.

The latest funding round was led by quantitative trading firm Jane Street, with participation from Kleiner Perkins, Sequoia Capital, Andreessen Horowitz, and Tiger Global. Headquartered in San Jose, California, Etched now has more than 400 employees and has already developed chips that are capable of running practical workloads.

Etched focuses on developing specialized computing systems for AI inference, with the goal of reducing the cost of running large AI models while improving inference performance. As AI models move from training into broader real-world deployment, demand for inference infrastructure is growing rapidly, attracting increasing investment across the AI computing sector.

Mamoon Hamid, managing partner at Kleiner Perkins, said AI inference is becoming one of the most important infrastructure markets. He noted that future competition will increasingly depend on how many tokens can be processed for each dollar spent and each watt of power consumed.

Etched has secured more than $1 billion in contracts from public and private AI companies, cloud service providers, and other customers. Jane Street is both an investor and Etched's first customer. The company received its first Etched rack system last month and has already begun deploying the technology in its operations.

In July, Etched raised $300 million in a Series C round at a valuation of $10.3 billion. The latest financing has pushed its valuation to $21 billion in less than a month, highlighting growing investor interest in AI chip alternatives to Nvidia as demand for AI inference infrastructure continues to accelerate.