AI chip startup Etched is reportedly reviewing investment offers that could value the company at $40 billion to $50 billion. These offers come just months after the company secured $700 million in funding at a $21 billion valuation.
The fundraising discussions are in early stages, and terms of any potential deal may change. Etched, which declined to comment, is pursuing the development of full AI hardware systems powered by its own proprietary chips, a segment of the AI industry described as particularly expensive.
Investors are reportedly interested in Etched due to its potential to challenge Nvidia. The four-year-old startup has attracted engineers from Nvidia, with approximately 15% of its 400-person workforce having previously worked for the chip giant. Quant trading firm Jane Street, which led Etched's last $700 million funding round, is also a customer and has received an early system.
Etched claimed in July that it had secured $1 billion in customer orders, including the one from Jane Street, after manufacturing its test chip at a TSMC factory this summer. The company states its chips can process more tokens faster and at a lower cost compared to Nvidia's offerings.