Etched's valuation doubles to $21B on Jane Street-led round

Etched announced Tuesday that it has raised another $700 million at a $21 billion valuation, led by Jane Street after the quant trading firm tested and bought the startup’s AI hardware.

Even by AI standards, this valuation step-up is jaw-droppingly fast: Etched was valued at $5 billion in December, raised a $300 million Series C at a $10.3 billion valuation in July, and has now seen investors double its valuation to $21 billion — up nearly $11 billion — in a single month.

Etched delivers its AI hardware as full systems it calls “frontier inference clusters” (rival Nvidia calls its equivalent systems “AI factories”). Co-founder and COO Robert Wachen told TechCrunch that investors are so enthusiastic because Etched designed two new components from scratch to speed up inference — the computing process that happens after a user submits a prompt, which Wachen said runs in two stages: prefill, where the system processes the prompt and its context, and decode, where it generates the output tokens the user sees.

Etched built a prefill chip that runs at low voltage, letting it pack in more transistors without the heat problems that plague other high-end AI chips, so it can process more tokens faster. For the decode stage, Etched created a new type of memory and interconnect it calls cluster-scale memory, which Wachen said lets many chips share a single memory pool at very low latency — yielding, Etched promises, higher speeds and lower costs.

Etched is still fighting a perception from its early days that it etches one particular model into its chips, so each chip is custom-built to run a single frontier model. That was the original intention, Etched says, but it’s no longer the case — its systems can now run any frontier model.

In the blog post announcing the new round, Jane Street said: “We tested the chip and are pleased with the early results. 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.” Other investors in Etched include Kleiner Perkins, Sequoia Capital, Andreessen Horowitz, Peter Thiel, Tiger Global, Bain Capital Ventures, Neo, Stripes, Primary, Positive Sum, Diffusion, Argo, and Blackstone.

Why it matters

Etched’s valuation quadrupled in under a year — and doubled in a single month — as investors bet its split prefill/decode chip architecture can out-compete Nvidia’s general-purpose AI systems on inference cost and speed.