Etched’s valuation doubles to $21B in a month

What happened

Etched on Tuesday announced that it has raised another $700 million at a $21 billion valuation, led by Jane Street after the famed quant fund 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. 3 billion valuation in July.

In the blog post announcing the new round, investment firm 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. ” 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.

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Why it matters

Now investors have doubled its valuation to $21 billion, up nearly $11 billion, in a month. ) Co-founder and COO Robert Wachen told TechCrunch that investors are so enthusiastic because Etched has designed two new components from scratch to speed up inference — the computing process that happens after a user submits a prompt. ” In the mathematically and compute-intensive “prefill phase,” the system must understand the prompt, including context.

In the memory-intensive “decode” phase, the system generates output tokens, meaning the actual answer the user sees. Etched created a prefill chip that operates at low voltage, allowing it to pack in more transistors without the typical heat problems of other high-end AI chips. It can therefore process more tokens faster.

Etched created a new type of memory and an interconnect for the decode process that the company calls cluster-scale memory. “It allows many chips to connect together and use a shared memory pool at a very, very fast, low latency,” Wachen said. The result, Etched promises, is higher speeds and lower costs.

What to watch

Etched is still battling the perception from its early days that it etches a particular model into its chips, meaning that each chip is somehow custom-designed to run one frontier model. That was its original intention but is no longer the case. Etched’s systems can run any frontier model.