Nvidia competitor Etched hits $5B valuation, $1B in sales for AI chip
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- Etched reported $1 billion in contract orders for its "frontier inference clusters" — chip, rack, and software bundles the company says run AI inference faster, cheaper, and more power-efficiently than rivals
- Etched raised a $500 million round in December at a $5 billion post-money valuation, bringing total funding to $800 million since its 2022 founding
- TSMC successfully manufactured Etched's chip earlier in 2025, allowing the company to begin customer testing of its first product
- Etched drew capital from VentureTech Alliance, Jane Street, Hudson River Trading, Two Sigma, Ribbit Capital, and Stripes (which led the $500M round), with angels including Andrej Karpathy, Geoffrey Hinton, Fei-Fei Li, Arthur Mensch, and Scott Wu; the cap table also includes Stanley Druckenmiller and Peter Thiel
- Co-founders Gavin Uberti and Robert Wachen dropped out of Harvard as Thiel fellows to start Etched; in 2023, every major investor they pitched passed on a 30-page memo arguing AI would need specialized chips beyond general-purpose GPUs
- The specialized inference market is heating up broadly: Cerebras completed a breakout IPO, Groq raised $650 million, hyperscalers Amazon, Google, and Microsoft build in-house chips, and OpenAI just announced its first custom chip built by Broadcom
Why it matters: Etched's $1 billion in pre-orders at a $5 billion valuation shows investor conviction that specialized inference chips can challenge Nvidia's GPU dominance — a bet every major investor passed on in 2023. Customers are committing before testing completes, so Etched's performance claims must now clear against Cerebras, Groq, and hyperscalers' in-house chips.
