Etched has closed a $300 million Series C funding round at a $10.3 billion valuation.
Co-founder and COO Robert Wachen confirmed the figure to TechCrunch. The round was led by Sequoia. Andreessen Horowitz, SK Hynix, Jane Street, and Diffusion Capital also participated, alongside earlier backers. Investors include Peter Thiel, Andrej Karpathy, Dylan Field, and Amjad Masad.
Valuation jumps
The company was valued at $5 billion in December after raising $500 million. That figure has doubled in roughly seven months. Etched claims this is the highest valuation ever for a Sequoia-led Series C.
Last month, the startup announced it had manufactured its homegrown chips. Clients are now testing full systems. The company has already booked orders worth $1 billion.
The chip design
Etched began operations when building chips for transformer-based AI models was considered wild. The company still faces perception that its products run only specific large language models. That is not the case, Wachen explains. The systems run any AI model. This includes Mixture of Experts models like DeepSeek and Qwen. It also supports non-transformer designs like Mamba, which uses a state-space model architecture.
Google is reportedly pursuing a similar concept with its Frozen v2 chip for Gemini. The idea of etching parts of a specific AI model directly into silicon is no longer considered far-fetched.
Etched’s main claim to fame is designing two new components to speed up inference. This is the computing process that happens after a user submits a prompt.
“Inference is built in two stages,” Wachen says, “prefill and decode.”
The prefill phase involves understanding the prompt and context. It is mathematically and compute-intensive. The decode phase generates the output tokens. This requires less computation but needs massive amounts of memory.
Etched created a prefill chip that operates faster by running at a much lower voltage than any other AI chip. The company calls this low-voltage inference. Lower voltage generates less heat, allowing the chip to pack in more transistors.
For the decode process, Etched created a new type of memory and interconnect technology called cluster scale memory. This allows many chips to connect together and use a shared memory pool at very fast, low latency. The result is high speeds but lower costs.
Early days
The startup launched before most of the tech world, besides Nvidia, understood AI’s specialized compute needs. Founders Gavin Uberti, Wachen, and CTO Chris Zhu faced plenty of skeptics. Doubts persisted even after announcing the first batch of silicon was successfully manufactured by TSMC.
Access to the systems has been limited to investors and early customers. This is how Etched landed its list of famous investors. They showed private demos in its office.
“Andrej Karpathy from Anthropic, Noam Brown from OpenAI, Geoffrey Hinton, as well as all the investors in the funding round — these are all people who actually tried the hardware and are very excited about it,” Wachen says.
The road has been difficult. More work is needed before rack systems are mass produced and delivered. The trio dropped out of Harvard to launch Etched. They did not know then how to raise cash or how to hire.
“We had no idea how hard it was going to be,” he said. “I think we still have to be humbled by what it will take to actually get to scale.”
Wachen remembers landing in the Bay Area after telling his parents he was leaving school. There was no office or apartment arranged. He slept on the floor of a friend’s unfurnished house.
“I remember staying in my friend’s house that they were about to sell, using a towel as a blanket,” he laughs. The founders eventually set up servers in the garage of an early employee. Every time the system needed a reboot, the employee would call his wife to hit the button.
Today, 400 people work in an office. Etched operates a 2 megawatt data center. The team is running tokens in the lab while working with some of the largest AI companies in the world.
Wachen has a blanket, a mattress, and multiple pillows now. He jokes about the upgrade.
More importantly, the founders never let doubters stop them. It has come a long way. The world is very different now. When you think something is possible and work at it for a long time, you can do it.
