This little-known AI chip startup just doubled its value to $10.3 billion in seven months

Etched, a startup founded by three Harvard dropouts, just closed a $300 million funding round led by Sequoia, with big names like Andreessen Horowitz and SK Hynix joining in. This comes after the company hit a $5 billion valuation in December, a stunning jump for a company many initially dismissed as unrealistic. The startup claims its chips can run any AI model, not just specific ones, and it has already booked $1 billion in orders.

The secret sauce is in how Etched designed its chips. Instead of relying on traditional methods, it built two new components from scratch to speed up inference, the process of generating AI responses. One chip handles the prompt understanding phase at low voltage, reducing heat and allowing more transistors. The other uses a new memory system to connect multiple chips efficiently. The result is faster performance at lower cost, a combo that’s hard to ignore.

Etched was born in 2022 when most of the tech world, outside of Nvidia, didn’t yet grasp the specialized needs of AI computing. The founders faced skepticism from the start, but they pushed forward, even sleeping on floors and running servers out of a garage. Now, with 400 employees and a 2-megawatt data center, they’re working with some of the largest AI companies globally.

The company’s rapid rise reflects the growing demand for specialized AI hardware. If Etched delivers on its promises, it could make AI more accessible and affordable, challenging Nvidia’s dominance. But questions remain about whether its chips will perform as well in real-world conditions as they do in demos.

What happens next depends on whether Etched can scale production and meet its $1 billion in orders. Investors are betting big, but the true test will be in the hands of customers.

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Filed under: AIchips, Etched, Startups, TechInvesting, AIFuture