Etched locks in $500M round at $5B valuation as AI chip orders surge

Etched, a San Jose-based AI chip startup focused on transformer inference hardware, has closed a previously undisclosed $500 million funding round at a $5 billion post-money valuation. The round was completed in December and brings the company’s total capital raised to approximately $800 million since its founding in 2022. Multiple reports note that this latest tranche is part of a series of financings that were not publicly detailed until the company emerged from stealth, and that the December round is the key driver of the new $5 billion valuation.

The $500 million financing was led by Stripes, with participation from VentureTech Alliance, Jane Street, Hudson River Trading, Jump Trading, Two Sigma, Ribbit Capital, Radical Ventures, Primary VC and Positive Sum, alongside individual backers such as Andrej Karpathy, Geoffrey Hinton, Fei-Fei Li, Arthur Mensch, Scott Wu, Stanley Druckenmiller and Peter Thiel. Several sources describe this round as Etched’s latest major raise, aligning with a Series B stage, and note that Jane Street’s cumulative commitments now exceed $100 million across multiple Etched financings. The December round was priced at a $5 billion post-money valuation, confirmed across multiple news and investor reports, and is associated with a deep strategic relationship with TSMC through VentureTech Alliance.

Etched’s funding milestone comes as the company reports more than $1 billion in signed customer contracts for its full-system AI inference products, which pair its custom Sohu ASIC chip with racks and software optimized for transformer workloads. The startup positions itself as a focused Nvidia competitor in inference, arguing that specialized hardware can deliver more efficient performance than general-purpose GPUs. Investors highlight the scale of committed orders and the speed of commercialization following the completion of manufacturing with TSMC earlier in the year as key reasons for supporting the $5 billion valuation.

Founded in 2022 by Gavin Uberti and Rob Wachen, Etched previously faced a near-death period in 2023 before assembling this large investor syndicate and securing major forward contracts. The December round and resulting valuation place Etched among the most highly valued private semiconductor startups. With substantial funding, strategic foundry backing, and a growing roster of quantitative trading firms and AI luminaries on its cap table, Etched is now positioned to begin shipping systems and to test whether its transformer-only inference architecture can materially shift economics in large-scale AI deployments.