Artificial intelligence (AI) startup Etched has announced that it has raised $120 million in Series A financing and plans to use this funds to further develop its dedicated AI chips.
This round of financing is led by Primary Venture Partners and Positive Sum Ventures, with well-known angel investors including former PayPal CEO Peter Thiel, Replit CEO Amjad Masad, Github CEO Thomas Dohmke, and Coinbase former CEO Balaji Srinivasan also participating.
The new round of financing will bring Etched's total financing amount to approximately $126 million, but the company has not disclosed its latest valuation. When it completed a seed round financing of $5.4 million in March 2023, investors valued the business at $34 million.
This company with 35 employees was founded by Gavin Uberti and Chris Zhu, and has recruited personnel who have worked in companies such as Cypress Semiconductor and Broadcom for research and development.
This San Francisco based company aims to manufacture a specialized chip for running specific types of AI models widely used, such as ChatGPT for OpenAI and Google Gemini. The company claims that its chips will be comparable to Nvidia's products.
It is estimated that Nvidia dominates the server AI chip market, accounting for approximately 80% of sales. Nvidia's general-purpose AI chips can handle a range of computing applications, but consume more energy than chips designed to perform specific functions.
Etched's engineers are designing the first AI chip, Sohu, to provide support for the AI computing part (called inference) that generates content and responses, which will be optimized to run specific forms of "transformer" AI models.
AI models are typically trained and run on graphics processing units (GPUs), such as Nvidia's H100, which can be used with any type of AI algorithm. Etched's Sohu chip only supports running the AI algorithm "transformer". This means there will be risks, as if another algorithm replaces the transformer, the Sohu chip will become useless.
"We have placed the biggest bet on AI," Etched CEO Gavin Uberti said in an interview. "If the transformer disappears, our company will go bankrupt. But if they persist, we will become one of the largest companies in history." Etched's goal is to provide chips that are more cost-effective, energy-efficient, and run faster.
Etched stated that the Sohu AI chip supports all popular transformers under Alphabet, including Google, Meta, Microsoft, OpenAI, and Aerospace, and can handle adjustments to future models.
"We are selling products to large transformer models," Gavin Uberti said. "We have received tens of millions of dollars in pre orders from customers, which is expected." However, he did not disclose the specific names of the customers.
Etched has partnered with TSMC to manufacture chips. Gavin Uberti stated that the company needs Series A financing to pay for the cost of sending its design to TSMC and manufacturing chips, a process known as "chip fabrication.".
