Etched Could Receive a $40 Billion Valuation

Etched, the US chip startup, may be on track for another huge leap in value. TechCrunch reports that people familiar with the company say investors are already circling with offers that price it at $40 billion or even $50 billion, after a $700 million round last August valued it at $21 billion.

Those talks are still early, so nothing is locked in yet. Etched declined to comment, which is standard startup theatre at this stage, but the money on offer points to a company that has become very expensive very quickly.

The reason is simple enough: Etched is chasing a brutally costly corner of AI, building full hardware systems around its own proprietary chips. One person familiar with the offers said that if the startup raised an amount similar to its last round, it could buy itself as much as 3.5 years of runway.

VCs also seem happy to pay for the story. Etched is four years old, says it can beat Nvidia on token processing speed and cost, and has Jane Street as both lead investor in the last round and as a customer that has already received an early system. Etched said in July that it had secured $1 billion in customer orders.

There is more. The Wall Street Journal reported that around 15% of Etched’s 400 employees previously worked at Nvidia. The company also runs a new 10-megawatt data center in Silicon Valley and has opened an office in Taiwan to stay close to TSMC production.