HomeEtched, Nvidia Rival, Hits $5B Valuation With $1B in AI Chip Sales
Etched, a rival to Nvidia in the AI chip sector, released a progress update on Tuesday, following TSMC’s successful production of its chips earlier this year. The startup reports securing $1 billion in contract orders for complete systems powered by its technology.
Etched is currently testing its initial product with clients, referring to these systems as “frontier inference clusters.” These bundles integrate the chips with custom-designed racks and software, aiming to accelerate inference, reduce costs, and improve power efficiency for frontier models compared to competitors. (Inference occurs after a user submits a prompt and represents the primary bottleneck and cost center for AI companies scaling services, explaining investor interest in solutions that address this challenge.)
Founded in 2022, Etched also announced it has raised a total of $800 million to date. The latest funding round, an undisclosed $500 million deal closed in December, valued the company at $5 billion post-money.
The startup has attracted prominent investors, including VentureTech Alliance, Jane Street, Hudson River Trading, Two Sigma, and Ribbit Capital. Angel investors feature AI leaders such as Andrej Karpathy, Geoffrey Hinton, Fei-Fei Li, Arthur Mensch, and Scott Wu. The cap table also includes billionaires Stanley Druckenmiller and Peter Thiel.
While the press release frames Tuesday’s announcement as Etched “coming out of stealth,” co-founders CEO Gavin Uberti and President Robert Wachen have discussed their chip strategy with TechCrunch since 2024. Both left Harvard to become Thiel Fellows and establish Etched, as Uberti explained to TechCrunch at the time.
By 2024, Etched had raised over $125 million and gained investor attention. However, on Patrick O’Shaughnessy’s “Invest Like the Best” podcast, the founders revealed that in 2023, they struggled to secure interest despite a 30-page memo arguing for specialized AI chips over general-purpose GPUs. Every major investor they approached declined. The company reportedly operated month-to-month, nearing cash exhaustion, during those early stages.
The current funding landscape contrasts sharply with the past. Investors are pursuing all AI-related ventures, particularly chip technology that enhances inference speed. Competitor Cerebras achieved the year’s first breakout IPO, while AI chipmaker Groq recently raised $650 million. Hyperscalers Amazon, Google, and Microsoft develop their own in-house AI chips. Even OpenAI announced its first custom chip, manufactured by Broadcom.
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Etched, a rival to Nvidia in the AI chip sector, released a progress update on Tuesday, following TSMC’s successful production of its chips earlier this year. The startup reports securing $1 billion in contract orders for complete systems powered by its technology.
Etched is currently testing its initial product with clients, referring to these systems as “frontier inference clusters.” These bundles integrate the chips with custom-designed racks and software, aiming to accelerate inference, reduce costs, and improve power efficiency for frontier models compared to competitors. (Inference occurs after a user submits a prompt and represents the primary bottleneck and cost center for AI companies scaling services, explaining investor interest in solutions that address this challenge.)
Founded in 2022, Etched also announced it has raised a total of $800 million to date. The latest funding round, an undisclosed $500 million deal closed in December, valued the company at $5 billion post-money.
The startup has attracted prominent investors, including VentureTech Alliance, Jane Street, Hudson River Trading, Two Sigma, and Ribbit Capital. Angel investors feature AI leaders such as Andrej Karpathy, Geoffrey Hinton, Fei-Fei Li, Arthur Mensch, and Scott Wu. The cap table also includes billionaires Stanley Druckenmiller and Peter Thiel.
While the press release frames Tuesday’s announcement as Etched “coming out of stealth,” co-founders CEO Gavin Uberti and President Robert Wachen have discussed their chip strategy with TechCrunch since 2024. Both left Harvard to become Thiel Fellows and establish Etched, as Uberti explained to TechCrunch at the time.
By 2024, Etched had raised over $125 million and gained investor attention. However, on Patrick O’Shaughnessy’s “Invest Like the Best” podcast, the founders revealed that in 2023, they struggled to secure interest despite a 30-page memo arguing for specialized AI chips over general-purpose GPUs. Every major investor they approached declined. The company reportedly operated month-to-month, nearing cash exhaustion, during those early stages.
The current funding landscape contrasts sharply with the past. Investors are pursuing all AI-related ventures, particularly chip technology that enhances inference speed. Competitor Cerebras achieved the year’s first breakout IPO, while AI chipmaker Groq recently raised $650 million. Hyperscalers Amazon, Google, and Microsoft develop their own in-house AI chips. Even OpenAI announced its first custom chip, manufactured by Broadcom.
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2026 Latest Top-rated Best Prompt Engineering Tools for Teams are featured here on XIX.AI. This curated collection includes powerful game-changing options that go through rigorous real-world tests. You’ll find a free vs paid comparison, detailed rankings, and easy tools to test, version track, and refine team prompts to boost productivity significantly. Explore now to Discover your perfect tool!
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2026 Latest Best AI Prompt Libraries for Work: XIX.AI curates a top-rated collection of powerful, game-changing prompt sets designed to help you reuse proven templates across countless tasks and boost your productivity significantly. Enjoy free vs paid comparison, detailed real-world tests, and updated rankings weekly. Explore now to discover your perfect tool and unlock your AI edge!
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