Etched, the AI chip startup that raised $700 million at a $21 billion valuation only two months ago, is now reviewing investment offers that value the company at $40 billion to $50 billion, according to people familiar with the matter cited by TechCrunch. The talks are early, so any deal's terms could still change. Etched declined to comment.
The numbers underline how quickly the startup has moved from promising challenger to one of the most sought-after names in AI hardware. Etched builds full AI systems around its own chips, a capital-heavy bet aimed at Nvidia's dominance in inference, the computing that happens after a user submits a prompt.
Etched valuation history and the new funding offers
The reported offers range from about $40 billion from top-tier investors to $50 billion from lesser-known backers, one person told TechCrunch. That is double or more the $21 billion valuation set in September, when Jane Street led a $700 million round. In July, Etched announced a $300 million round at a $10.3 billion valuation led by Sequoia.
Back-to-back rounds like these, effectively one financing split into two tranches with separate valuations, have become common among the buzziest startups. A person familiar with the offers said that if Etched raises as much as its last round, it could secure as much as 3.5 years of runway.
Etched chips, customers and the Nvidia challenge
Etched's pitch rests on two components designed from scratch to speed up inference. The company claims its chips can process more tokens faster and at lower cost than Nvidia's, a gap that matters enormously to customers like quant trading firm Jane Street, where a microscopic speed advantage can translate into large profits.
In July, Etched said it had already secured $1 billion in customer orders, including Jane Street's, after manufacturing its test chip at a TSMC factory this summer. The four-year-old company also operates a 10-megawatt data center in Silicon Valley and set up a facility in Taiwan to coordinate production near TSMC.
