Etched Secures $700 Million Funding at $21 Billion Valuation Led by Jane Street
Etched has announced the successful raising of $700 million, propelling its valuation to $21 billion, with Jane Street leading the investment after evaluating and purchasing the startup’s AI hardware. This dramatic increase in valuation marks a significant leap, as Etched was valued at just $5 billion in December and raised a $300 million Series C round at a $10.3 billion valuation in July.
Etched offers its AI technology in the form of full systems termed “frontier inference clusters.” Co-founder and COO Robert Wachen explained that the impressive investor enthusiasm stems from the development of two new components designed to expedite the inference process, which occurs post-prompt submission.
“Inference is built in two stages,” Wachen stated, detailing the “prefill” phase, where the system interprets the user’s prompt, and the “decode” phase, during which it generates the actual output tokens. The company has engineered a prefill chip that functions at low voltage, allowing for a higher transistor density without the overheating issues associated with typical high-performance AI chips, thus enabling faster token processing.
Additionally, Etched has developed a new type of memory and an interconnected system known as cluster-scale memory specifically for the decoding process. “It allows many chips to connect together and use a shared memory pool at a very, very fast, low latency,” Wachen noted, emphasizing the performance enhancements and potential cost reductions promised by the technology.
Despite early perceptions that Etched chips were custom-designed for specific models, the company’s current systems can operate with any frontier model. In a blog post regarding the funding, Jane Street expressed satisfaction with the initial results of the chip testing, stating, “Etched’s unique approach to inference delivers the precision we will need to support our most demanding workloads. We’re excited to now have our own rack running in our datacenter.”
Additional investors in Etched include notable firms such as Kleiner Perkins, Sequoia Capital, Andreessen Horowitz, Peter Thiel, Tiger Global, Bain Capital Ventures, Neo, Stripes, Primary, Positive Sum, Diffusion, Argo, and Blackstone.
