AI chip startup Etched has raised another $700 million, pushing its valuation to $21 billion and nearly doubling its value just one month after its last funding round.
The latest investment was led by quantitative trading firm Jane Street, which tested Etched’s technology before investing and has since deployed one of the startup’s systems at its data centre.
The latest deal represents a sharp rise from Etched’s $10.3 billion valuation in July, when the company raised $300 million in a Series C round. It was valued at $5 billion in December.
Its latest funding has now added almost $11 billion to its valuation in about a month, highlighting the growing investor appetite for companies developing hardware for artificial intelligence.
The San Jose-based startup develops chips and complete computing systems designed to speed up AI inference, the process through which an AI model generates an answer after receiving a prompt.
Co-founder and Chief Operating Officer Robert Wachen said investors are attracted to Etched’s work on two components designed from scratch to improve inference performance.
“Inference is built in two stages, prefill and decode,” he said.
He explained that the prefill stage involves processing a user’s prompt and its context, while the decode stage is when the system generates the response that the user sees.
Wachen said the company’s memory technology allows several chips to connect to a shared memory pool at high speed and low latency.
The company packages its technology into systems it calls “frontier inference clusters”, putting it in competition with Nvidia in the growing AI infrastructure market.
Jane Street said its decision to invest followed its own testing of Etched’s hardware.
See also: Nigerian Drone Startup Terra Raises $18m, Eyes Global Defence Market
“We tested the chip and are pleased with the early results,” the firm said, adding that Etched’s approach to AI inference provides the precision needed for its most demanding workloads.
Jane Street also said it was “excited to now have our own rack running in our datacenter.”
The investment firm is not only Etched’s lead investor but also its first publicly identified customer, giving the startup a major endorsement as it seeks to establish itself in a market dominated by Nvidia.
Etched has also moved away from an early strategy of designing chips around individual AI models. Wachen said its systems can now run any frontier model.
Other investors in the latest round include Kleiner Perkins, Sequoia Capital, Andreessen Horowitz, Peter Thiel, Tiger Global, Bain Capital Ventures, Neo, Stripes, Primary, Positive Sum, Diffusion, Argo and Blackstone.
About the Author
Cecilia Attah is a tech analyst with a degree from Benue State University. She covers tech news and startups at TechRegard with a focus on how technology is transforming Africa and shaping the global landscape.
