Nvidia rival Etched targets $20 billion valuation as AI chip startup races for funding

Nvidia's New AI Rival Could Reportedly Be Worth $20 Billion - NVIDIA (NASDAQ:NVDA), Cerebras Systems (NAS

Nvidia (NASDAQ:NVDA) rival AI chip startup Etched is reportedly in talks to raise funds at roughly a $20 billion valuation, quadrupling its prior mark. Existing backer Jane Street is spearheading the new financing, The Wall Street Journal reported on Friday, citing sources. Separately, Etched is raising a round led by Sequoia Capital at a $10 billion valuation. Neither deal has closed, and terms may still shift. Etched did not immediately respond to Benzinga's request for comment. Back-to-Back Funding Rounds The two funding rounds reflect a growing trend among AI startups, which are raising capital at sharply different valuations within weeks. Strong investor demand, limited access to top-tier deals, and fear of missing out on the next big AI winner are pushing some backers to pay up quickly, allowing companies to return for follow-on rounds at steeply higher prices. San Jose-based Etched builds chips for AI inference, running trained models, rather than general-purpose GPUs like Nvidia's. Its website cites roughly $1 billion in customer interest, though large-scale deliveries haven't started. Growing Competition Founded in 2022 by Harvard dropouts Gavin Uberti, Chris Zhu and Robert Wachen, Etched counts Peter Thiel and Ribbit Capital among early backers. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Image via Shutterstock Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

Etched seeks $20 billion valuation in new AI chip funding round - WSJ reports By Investing.com

Investing.com -- Artificial intelligence chip startup Etched is in talks to raise capital at a valuation of about $20 billion, quadrupling its previous valuation as investors seek alternatives to Nvidia Corp. (NASDAQ:NVDA), The Wall Street Journal reported, citing people familiar with the matter. Jane Street, an existing investor in the San Jose-based company, is leading the proposed financing. Etched is also raising money through a separate round led by Sequoia Capital at a $10 billion valuation. Neither transaction has closed, and their terms could still change. The two rounds illustrate a growing practice among leading AI startups of raising capital at sharply different valuations within a short period. Strong investor demand has allowed some companies to sell stakes before returning for additional funding at substantially higher prices. Etched is developing specialised chips for AI inference, the process of running trained models to generate responses or complete tasks. Its approach differs from the graphics processing units that Nvidia sells for both training and inference workloads. The startup is testing its initial chip design and validating its first product. Its website indicates that prospective customers have expressed interest in about $1 billion in demand, though the company has yet to begin large-scale commercial deliveries. Nvidia remains the dominant supplier of processors used to build and operate AI systems. Demand for alternatives has grown as technology companies seek lower inference costs, greater supply, and chips optimised for specific workloads. Several startups are pursuing the same opportunity. Cerebras Systems and Groq have gained attention for their AI processors, with SambaNova Systems and UK-based Fractile also developing inference-focused hardware. Etched was founded in 2022 by Harvard dropouts Gavin Uberti, Chris Zhu and Robert Wachen. Earlier investors include Stripes, Peter Thiel, Ribbit Capital, and Primary Venture Partners. The proposed $20 billion valuation would place the four-year-old company among the world's most highly valued private semiconductor startups before its first chip has been commercially validated.