AI chip startup Etched hits $10.3B valuation from big-name investors

AI chip startup Etched has achieved a $10.3 billion valuation after securing funding from prominent investors, defying earlier skepticism about its technology. The company, founded by three Harvard dropouts, claims to have developed new chips and memory components that accelerate inference on any AI model without needing graphics processing units (GPUs).

The funding round was led by major venture capital firms and includes investments from industry figures. The valuation marks a significant milestone for the startup, which aims to challenge established players like Nvidia in the AI hardware market. Etched's technology is designed to handle the computational demands of AI inference—the process of running trained models—more efficiently than traditional GPUs.

This development matters because the AI industry is heavily reliant on GPUs, which are expensive and power-hungry. If Etched's chips prove effective, they could reduce costs and energy consumption for companies deploying AI, potentially reshaping the hardware landscape. The startup's success also highlights growing investor appetite for alternatives to Nvidia's dominant chips.

Etched was founded in 2022 by Chris Zhu, Robert Wachen, and Gavin Uberti, who left Harvard to pursue the venture. The company previously raised $120 million in a seed round at a $400 million valuation. Its latest funding round, which closed in early 2024, brought total investment to over $200 million.

The company plans to use the new capital to scale production of its chips and expand its engineering team. Etched expects to begin shipping its first commercial products to customers later this year, with initial deployments targeting large-scale AI inference workloads in data centers.