Etched doubles its valuation to $21 billion in a single month with backing from Jane Street to accelerate inference hardware

AI hardware company Etched announced that it has raised an additional $700 million in a funding round that valued the company at $21 billion, led by quantitative trading firm Jane Street after testing the chips and purchasing hardware for deployment in its data centres. The round marks a rapid increase in valuation for the company, which was valued at $5 billion in December and subsequently raised $300 million in a Series C round at a $10.3 billion valuation in July, doubling its valuation and adding nearly $11 billion in a single month.

Etched offers its technology as integrated systems branded as advanced inference clusters, contrasting with the full systems its competitor Nvidia calls AI factories. Investor confidence is built on a ground-up redesign of two core components to accelerate inference, the compute stage triggered when a user submits a prompt, with co-founder and chief operating officer Robert Wachen noting that inference is architecturally divided into two stages: prefill and decode.

Splitting inference into two separate paths anchors the company's effort to cut costs and increase compute speedThe prefill phase demands heavy computational and mathematical throughput to parse input context, for which the company built a dedicated chip that runs at low voltage to pack in more transistors without the thermal dissipation challenges typical of advanced AI silicon, allowing larger token volumes to be processed at higher speeds. In contrast, the decode phase is memory-intensive as it generates the final output tokens, prompting the company to design a new memory type with an interconnect architecture termed cluster-level memory, connecting multiple chips to a unified memory pool with low latency.

The architecture moves beyond single-model hardware to support all leading modelsEtched is working to dispel the perception established in its early days that its chips are hardwired to a single model, asserting that its current systems support diverse frontier models without software limitations. In the funding announcement, Jane Street stated that initial testing validated the chip's accuracy on demanding workloads, with the first hardware rack already operational in its data centre. The company's investor base includes Sequoia Capital, Andreessen Horowitz, Peter Thiel, Kleiner Perkins, Tiger Global, Bain Capital Ventures, and Blackstone.