AI chip startup Etched raises $300M, valued at $10.3B

AI chip startup Etched has raised $300 million in a Series C funding round, valuing the company at $10.3 billion, more than double its valuation from December. The financing, led by Sequoia Capital and announced on July 23, marks the highest valuation ever for a Sequoia-led Series C round. Other participants included Andreessen Horowitz, SK Hynix, Jane Street, and Diffusion Capital.

The San Jose-based company designs complete hardware systems optimized for AI inference, the process of running trained AI models to respond to user prompts. Etched differentiates its technology by focusing solely on inference rather than the combined training and inference workloads handled by general-purpose chips like Nvidia's GPUs. The company says this specialization allows for greater efficiency.

Etched's technical approach centers on two proprietary components designed to accelerate the two stages of inference. For the initial "prefill" phase, where a prompt is processed and understood, the company developed a low-voltage inference chip. Operating at a lower voltage reduces heat generation, enabling the chip to run at higher clock frequencies and pack in more transistors. For the subsequent...