AI inference chip startup Etched is in negotiations to raise $700 million in a new financing round led by existing investor Jane Street, according to reporting from The Wall Street Journal. The proposed financing would value the San Jose-based semiconductor company at approximately $21 billion.
The planned round follows a $300 million Series C led by Sequoia Capital that valued the startup at $10.3 billion, effectively doubling its valuation within weeks amid intensifying enterprise demand for specialized inference hardware.
Hardwired Transformer ASICs vs General-Purpose GPUs
Founded in 2022 by Gavin Uberti, Chris Zhu, and Robert Wachen, Etched takes an architectural approach distinct from general-purpose graphics processing units (GPUs). Rather than supporting arbitrary parallel compute workloads or training routines, Etched designs application-specific integrated circuits (ASICs) hardwired directly to execute transformer attention mechanisms and frontier model architectures.
By baking transformer mathematical operations directly into silicon pathways, the design aims to eliminate runtime instruction overhead, maximize memory bandwidth utilization, and significantly lower power consumption per generated token compared to conventional GPUs.
Rack-Scale System Design and Production Scaling
In addition to custom silicon manufactured on advanced TSMC process nodes, Etched develops full rack-scale systems in-house. The company's engineering scope encompasses:
- Custom Server Enclosures: Proprietary circuit boards, power delivery networks, and liquid cooling cold plates built to support high-density inference clusters.
- Model Compatibility: Hardware validation across prominent open-weight and proprietary architectures, including DeepSeek, Qwen, Llama, and hybrid state-space models.
- Manufacturing Expansion: Operating from an 80,000-square-foot prototyping and production facility in San Jose to handle customer rack deployments.
Etched previously disclosed over $1 billion in commercial pre-orders and customer deployment commitments from major quantitative trading firms and cloud infrastructure providers.
The funding round terms remain subject to final closing conditions.
