Etched’s valuation doubles to $21B in a month
Etched raised $700M at $21B valuation, doubling its valuation in a month, led by Jane Street.
Even by the breakneck standards of AI investments, the step-up is remarkable. Etched was valued at $5 billion in December, then raised a $300 million Series C at a $10.3 billion valuation in July. Now investors have valued it at $21 billion, an increase of nearly $11 billion in a month.
Etched sells its AI technology as full systems called “frontier inference clusters.” Nvidia, a competitor, refers to its own full systems as AI factories. The company’s co-founder and COO, Robert Wachen, told TechCrunch that investor enthusiasm stems from Etched having designed two new components from scratch to speed up inference, the computing process that occurs after a user submits a prompt.
“Inference is built in two stages,” Wachen said: “prefill and decode.” In the mathematically intensive prefill phase, the system processes the prompt, including context. In the memory-intensive decode phase, it generates output tokens, the answer the user sees.
Etched developed a prefill chip that operates at a low voltage, allowing it to pack in more transistors without the heat problems typical of other high-end AI chips, thus processing more tokens faster. The company also designed a new type of memory and an interconnect for the decode process, which it calls cluster-scale memory. According to Wachen, this lets many chips connect and share a memory pool at very fast, low latency. The result, Etched promises, is higher speeds and lower costs.
Etched still faces a lingering perception from its early days that it etches a specific model into its chips, making each chip custom-designed for one frontier model. That was the original intention, but is no longer the case. Etched’s systems can now run any frontier model.
In a blog post announcing the round, Jane Street said: “We tested the chip and are pleased with the early results. Etched’s unique approach to inference delivers the precision we will need to support our most demanding workloads. We’re excited to now have our own rack running in our datacenter.”
Other investors in Etched include Kleiner Perkins, Sequoia Capital, Andreessen Horowitz, Peter Thiel, Tiger Global, Bain Capital Ventures, Neo, Stripes, Primary, Positive Sum, Diffusion, Argo, and Blackstone.