Etched Eyes $40 Billion Valuation as Specialized AI Silicon Bets Mount

AI chip startup Etched is reportedly reviewing investment offers that value the company between $40 billion and $50 billion, as TechCrunch first reported. This comes just months after the company raised $700 million at a $21 billion valuation in September, following a July round led by Sequoia that valued the firm at $10.3 billion.

While Etched declined to comment, the surge in valuation reflects a bet on the startup's ability to disrupt Nvidia's pricing power and market hold. Co-founder and COO Robert Wachen told TechCrunch that investor enthusiasm stems from two proprietary components designed to accelerate inference—the process occurring after a user submits a prompt. According to the company, its chips provide lower costs and faster token processing than hardware from Nvidia.

This speed advantage has already attracted high-profile clients. TechCrunch reports that quant trading firm Jane Street led the $700 million round and is a customer that has already taken delivery of an early system. Etched stated in July that it has secured $1 billion in customer orders after manufacturing a test chip at a TSMC factory.

To support its hardware ambitions, the company operates a 10-megawatt data center in Silicon Valley and a production coordination facility in Taiwan. The startup's talent pool also serves as a signal to investors; The Wall Street Journal reports that approximately 15% of Etched's 400-person workforce consists of former Nvidia engineers.

Founded by Harvard dropouts Gavin Uberti, Chris Zhu, and Robert Wachen, Etched is pursuing the capital-intensive goal of building full AI hardware systems. A new funding round of similar size to the last could provide the company up to 3.5 years of runway, according to a source cited by TechCrunch.