Etched Secures $800M, $5B Valuation, Challenges Nvidia in AI Chips
AI chip startup Etched raises $800 million, achieves $5 billion valuation.
"Etched just bagged $800M and $1B in sales. Nvidia's got new competition in the AI chip game. Watch out!"
AI chip startup Etched has raised a total of $800 million, with its most recent funding round of $500 million closing in December at a $5 billion post-money valuation. The company, founded in 2022, has also secured $1 billion in contract orders for its AI inference systems, which include chips, custom-designed racks, and software. These systems are designed to improve the speed, cost-efficiency, and power efficiency of running inference for frontier models.
Etched's investors include VentureTech Alliance, Jane Street, Hudson River Trading, Two Sigma, Ribbit Capital, and Stripes, which led the $500 million round. Angel investors such as Andrej Karpathy, Geoffrey Hinton, Fei-Fei Li, Arthur Mensch, and Scott Wu have also invested, alongside billionaires Stanley Druckenmiller and Peter Thiel. The company's chips were manufactured by TSMC earlier this year, and Etched is currently testing its first product with customers.
This development positions Etched as a competitor in the intensifying AI chip market, aiming to challenge the dominance of companies like Nvidia. The significant funding and contract orders highlight growing investor interest in specialized chip technology that addresses bottlenecks and cost centers in AI inference.
This significant investment and contract bookings for Etched indicate a burgeoning market for specialized AI inference chips. Businesses relying on large-scale AI operations should note the potential for more efficient and cost-effective solutions to power their models.
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