AI Chip Startup Etched Defies Skeptics, Hits $10.3 Billion Valuation from Big-Name Investors
Etched, the AI chip startup founded by three Harvard dropouts in 2022, has closed a $300 million Series C funding round at a $10.3 billion valuation, co-founder and COO Robert Wachen tells TechCrunch.
The round was led by Sequoia, with Andreessen Horowitz, SK Hynix, Jane Street, and Diffusion Capital also participating, along with other, earlier investors. Other backers of the company include names like Peter Thiel, Andrej Karpathy, Dylan Field, Amjad Masad, and more.
Etched was previously valued at $5 billion in December when it raised a $500 million round, meaning it has doubled its valuation in about seven months. The company says this is the highest valuation ever for a Sequoia-led Series C.
Last month, Etched announced that it had successfully manufactured its homegrown chips, that its first full systems were being tested by clients, and it had already booked $1 billion worth of orders.
Etched launched at a time when the idea of building a chip specifically for AI models based on transformer technology (the architecture behind most modern AI systems, including ChatGPT and Claude) was considered wild if not wacky. The company is still battling the perception that its products — which are sold as full systems, not just chips — involve chips designed to run only specific LLMs.
However, Wachen explains that the systems can run any AI model, including Mixture of Experts models like DeepSeek and Qwen — an architecture that splits tasks across specialized sub-models rather than relying on one large model — as well as non-transformer designs like Mamba, which is built on a different underlying architecture known as a state-space model.
In an effort to speed up inference, the computing process that happens after a user submits a prompt, Etched created a prefill chip that operates ‘dramatically’ faster by running at a much lower voltage than any other AI chip. The company also created a new type of memory and ‘interconnect technology that we call cluster scale memory,’ which allows many chips to connect together and use a shared memory pool at a very, very fast, low latency.
The result, Etched promises, is high speeds but lower costs. The startup’s claim to fame today is that it designed two new components from scratch to speed up inference, and it is working with some of the largest AI companies in the world.
Despite the success, Etched’s founders, CEO Gavin Uberti, Wachen, and CTO Chris Zhu, have faced plenty of skeptics who doubted the company’s ability to succeed. The trio famously dropped out of Harvard to launch Etched, not knowing then how to raise cash (much less the loads of it they would need) or how to hire.
‘We had no idea how hard it was going to be,’ Wachen said. ‘I think we still have to be humbled by what it will take to actually get to scale.’
Today, there are 400 people bustling in an office, and Etched operates a 2 megawatt data center. The company has come a long way since its humble beginnings, and it is now working with some of the largest AI companies in the world.
‘It’s come a long way. It’s a very, very different world. But I think, when you really think something’s possible, and you just work at it for a long time, you can do it,’ Wachen said.
