The startup Etched, specializing in the development of innovative chips for artificial intelligence, announced that it has raised $500 million in a new funding round. The main investor was Stripes, with billionaire Peter Thiel, Positive Sum, and Ribbit Capital also participating in the funding. According to sources who wished to remain anonymous, Etched’s valuation after the round was estimated at $5 billion. The total amount of investments raised by the company has approached $1 billion. Etched’s headquarters is located in San Jose, California, but representatives of the startup are currently refraining from official comments.
This is reported by Finway
Development of the New AI Chip Sohu and Strategic Collaboration
Etched is actively working on the creation of the Sohu chip, aimed at meeting the growing demand for computing power for artificial intelligence. To produce Sohu, the startup is collaborating with the Emerging Businesses Group of Taiwan Semiconductor Manufacturing Co. (TSMC). The Etched team has welcomed highly skilled professionals who previously worked at Cypress Semiconductor and Broadcom Inc., highlighting the company’s ambitions in the high-tech market.
Competition with Nvidia and Involvement of Notable Investors
Nvidia is currently the leader in the field of artificial intelligence accelerators—chips that enable the creation and functioning of AI models. Its dominance in the market has spurred the emergence of new players, including startups like Etched, which seek to offer alternative solutions. Demand for Nvidia products continues to grow, and the company forecasts that by the end of 2026, sales to data centers will exceed half a trillion dollars.
Peter Thiel and Positive Sum were among the previous investors in Etched, alongside Primary Venture Partners and angel investors such as former GitHub CEO Thomas Dohmke and former Coinbase executive Balaji Srinivasan.