Artificial intelligence (AI) startup Etched has secured an impressive $120 million in a series-A funding round, as it seeks to revolutionize AI chip development and challenge Nvidia’s dominance. The San Francisco-based company aims to develop a specialized processor designed to run a specific type of AI model, commonly used by OpenAI’s ChatGPT and Google Gemini.
Nvidia currently dominates the market for server AI chips, capturing an estimated 80% of sales. However, Etched believes that its specialized chip, optimized for running a type of AI model known as a transformer, could offer a more energy-efficient solution than Nvidia’s general-purpose AI chips, which are capable of handling a range of computing applications but can consume more power.
Etched’s funding round attracted noteworthy backers, including former PayPal CEO Peter Thiel and Replit CEO Amjad Masad. CEO Gavin Uberti expressed confidence in the company’s potential, highlighting the reliance on transformers in the AI industry. Uberti stated, “If transformers go away, our company will die. But if they stick around, we’re going to be one of the biggest companies of all time.”
Etched has partnered with Taiwan Semiconductor Manufacturing Co. (TSMC) to fabricate its specialized chips. The funding secured through the series-A round will help cover the costs of sending the chip designs to TSMC and manufacturing the chips, a process known as “taping out” a chip. Although the company did not disclose its valuation, during its previous seed-funding round in March 2023, investors valued Etched at $34 million.
This significant funding injection will provide Etched with the resources it needs to accelerate its chip development efforts and challenge Nvidia’s market dominance. By focusing on a specific kind of AI model and optimizing its chip for that purpose, Etched aims to offer a compelling alternative to existing solutions in the market.
Etched’s story is one of determination and ambition, with a small team of just 35 employees passionately working towards their vision. With the backing of industry leaders and a partnership with TSMC, Etched is positioning itself as a significant player in the AI chip development space. As developments continue to unfold, the future of AI chip technology promises to be an exciting and competitive landscape.
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