AI chip startup Etched hits $5B valuation with $1B in sales

On Tuesday, Etched, an AI chip startup established in 2022 by Harvard alumni Gavin Uberti and Robert Wachen, revealed that TSMC has successfully produced its chip. The company has secured $1 billion in contracts for its "frontier inference clusters," which are comprehensive systems that include chips, custom racks, and software aimed at enhancing inference for advanced AI models. To date, Etched has raised $800 million, with a significant $500 million funding round completed in December, achieving a $5 billion post-money valuation, led by Stripes and supported by VentureTech Alliance, Jane Street, Hudson River Trading, Two Sigma, and Ribbit Capital. Notable angel investors include renowned AI figures such as Andrej Karpathy and Geoffrey Hinton, along with billionaires Stanley Druckenmiller and Peter Thiel. The company asserts that its systems provide quicker, more cost-effective, and energy-efficient inference compared to competitors. Despite facing funding challenges in 2023, the current investment landscape is more favorable, with significant interest in AI chip technology, as rivals like Cerebras, Groq, and major players like Amazon, Google, Microsoft, and OpenAI pursue custom AI chips.