AI chip startup Etched has raised $800 million, marking one of the largest funding rounds for an artificial intelligence hardware company this year. The move, announced on Tuesday, comes as investors continue searching for credible alternatives to Nvidia in the rapidly growing AI infrastructure market.
The company also revealed that it has secured $1 billion in sales contracts, underscoring strong early demand even before its chips enter full commercial production.
Etched said it expects to begin shipping its AI chips to select customers this summer, bringing the startup closer to commercial deployment after spending the past two years developing its technology largely out of the public spotlight.
The latest funding builds on a $500 million financing round completed in December that was led by growth investment firm Stripes.
That round attracted a high-profile group of investors, including Peter Thiel, Positive Sum, Ribbit Capital, Jane Street, Hudson River Trading, Two Sigma and VentureTech Alliance, a venture capital firm linked to Taiwan Semiconductor Manufacturing Co. (TSMC).
Jane Street deepens bet on Etched with more than $100M investment
The company also disclosed that trading giant Jane Street had previously led an undisclosed funding round and has continued increasing its investment. According to people familiar with the matter, the firm’s total commitment to Etched has now exceeded $100 million.
Etched’s investor base also includes several prominent figures from the worlds of artificial intelligence and finance, including AI pioneers Geoffrey Hinton and Fei-Fei Li, as well as billionaire investor Stanley Druckenmiller.
Founded in 2022, Etched is attempting to carve out a niche in one of the fastest-growing areas of artificial intelligence computing: AI inference.
Unlike AI training chips, which are used to build large language models, inference chips are designed to run those models once they have already been trained. As AI adoption accelerates across industries, inference workloads are expected to become an increasingly important part of the market.
The company said it is already testing its products and has signed $1 billion worth of customer contracts, although it declined to identify the companies behind those agreements.
Etched is also taking a broader approach than simply designing chips
The startup said it is working closely with TSMC on low-voltage inference technology while developing an entire server system around its processors, including circuit boards, cooling systems and networking infrastructure.
By controlling more of the hardware stack, Etched hopes to deliver optimized systems capable of handling large-scale AI inference more efficiently.
That strategy comes as demand for AI computing power continues to surge.
While Nvidia remains the dominant supplier of AI chips, growing demand has encouraged customers to explore alternative suppliers capable of delivering competitive performance and additional computing capacity.
Industry analysts also expect AI spending to gradually shift from model training toward inference as businesses deploy AI applications at scale.
If that trend continues, startups focused on inference hardware could find themselves competing in one of the industry’s fastest-growing segments.
Although Etched still has a long way to go before challenging Nvidia’s market leadership, the combination of substantial funding, early customer demand and backing from some of the technology and finance industry’s biggest names positions the company as one of the more closely watched emerging players in the AI semiconductor race.
