Etched Doubles Valuation to $10.3B With $300M Series C Round

AI chip developer Etched has secured $300 million in Series C funding, achieving a $10.3 billion valuation and marking a significant milestone for the Bay Area-based startup. The round was led by Sequoia Capital, with participation from Andreessen Horowitz, SK Hynix, Jane Street, and Diffusion Capital. Notable individual backers include Peter Thiel, Andrej Karpathy, and Dylan Field. This valuation represents a doubling of the company’s worth since its $500 million December round and stands as the highest ever recorded for a Sequoia-led Series C. Co-founded by Harvard dropouts Gavin Uberti, Robert Wachen, and Chris Zhu in 2022, Etched has spent the past three years developing custom silicon specifically optimized for artificial intelligence inference. While the concept of architecting hardware tailored to transformer models faced initial skepticism, Etched’s engineering approach centers on accelerating the two-stage inference process. The company engineered a low-voltage prefill chip that significantly reduces thermal output and computation time, alongside a proprietary cluster-scale interconnect and memory system to handle the decode phase. These innovations enable high-throughput token generation across diverse architectures, including Mixture of Experts models like DeepSeek and Qwen, as well as state-space designs like Mamba. Etched markets its technology as complete rack-scale systems rather than standalone processors. The startup’s technical progress has already generated substantial commercial traction. Etched recently confirmed successful tape-out and manufacturing of its initial silicon through TSMC, with full systems now undergoing client testing. The company has secured $1 billion in pre-orders and recently hosted private hardware demonstrations for early investors and industry leaders, including Geoffrey Hinton and Noam Brown, which directly catalyzed the latest funding. Despite the influx of capital, the founders acknowledge the operational challenges ahead, transitioning from early garage-based development and a 400-person workforce to full-scale manufacturing and global distribution. Etched now operates a two-megawatt data center and is actively processing tokens alongside major artificial intelligence enterprises. The successful funding round signals a broader industry shift toward specialized inference hardware, validating Etched’s long-term strategy against a market historically dominated by general-purpose accelerators. As the company prepares to scale production and deliver its systems to enterprise clients, its focus remains on maintaining computational efficiency while reducing total cost of ownership for next-generation AI workloads.