Jane Street-backed AI chip startup Etched said on Tuesday it raised $700 million in a funding round that valued the company at $21 billion — more than doubling its $10.3 billion Series C valuation from just weeks earlier.
The San Jose-based company builds specialized AI inference systems designed to make models faster and cheaper to run, joining a growing cohort of startups seeking to chip away at Nvidia's dominance in the AI hardware market. Jane Street, which led the round, is also Etched's first customer and received its first rack of chips last month, now deploying the technology in its trading workloads.
Kleiner Perkins, Sequoia Capital, Andreessen Horowitz, and Tiger Global also participated in the round. Etched said it has secured more than $1 billion in customer contracts across public and private AI companies as well as cloud providers, and has now raised $1.9 billion to date.
The funding underscores surging investor appetite for inference infrastructure — the process of using trained AI models to generate responses — which is becoming one of the largest and fastest-growing segments of the AI economy. "Inference is becoming one of the most important infrastructure markets in AI, and the winners will be measured by tokens per dollar and per watt," said Kleiner Perkins Managing Partner Mamoon Hamid.
Etched, with more than 400 employees and a working chip, is among the most well-funded Nvidia challengers. The company's rapid valuation jump reflects both the scarcity of viable alternatives to Nvidia's GPUs and the growing conviction among investors that inference-specific hardware will be a massive market as AI adoption scales.
