Etched announced Tuesday that it has raised an additional $700 million at a Jane Street-led valuation of $21 billion after a prominent quantitative fund tested and purchased the company’s AI hardware.
Even by AI standards, this rating increase is surprisingly fast. Etching was valued at $5 billion in December. The company raised $300 million in Series C in July at a valuation of $10.3 billion. Now, investors have doubled its valuation to $21 billion, an increase of nearly $11 billion in one month.
Etched offers its AI technology as a complete system called a “Frontier Inference Cluster.” (Etched competitor Nvidia calls its entire system an AI factory.)
Co-founder and COO Robert Wachen told TechCrunch that investors are so enthusiastic because Etched designed two new components from the ground up to speed up inference, the computing process that occurs after a user submits a prompt.
“Inference is built in two stages: prefill and decode,” Wachen says. The mathematical and computationally intensive “prefill phase” requires the system to understand the prompt, including the context. During the memory-intensive “decode” phase, the system produces output tokens, the actual answers that are displayed to the user.
Etched has created a pre-filled chip that operates at low voltages, allowing it to include more transistors without the thermal issues common with other high-end AI chips. Therefore, more tokens can be processed faster. Etched has created a new type of memory and interconnect for the decoding process that the company calls cluster-scale memory.
“This allows many chips to connect together and use a shared memory pool at very high speeds and low latency,” Wachen said. The result will be faster speeds and lower costs, Etched promises.
Etched still struggles with the early perception that etching a specific model into a chip meant that each chip was somehow custom designed to run one Frontier model. That was the original intent, but that is no longer the case. Etched’s system can run any frontier model.
In a blog post announcing the new round, investment firm Jane Street said, “We have tested the chip and are pleased with the early results. Etched’s unique inference approach provides the precision needed to support the most demanding workloads. We are excited to be running our own racks in our data centers.”
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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