In a remarkable turn of events, Etched has announced a $700 million funding round at a staggering $21 billion valuation, marking a doubling of its valuation in just a month. This exponential growth is unprecedented in the AI industry, where companies are often measured in years, not months.

A Quantum Leap in AI Hardware

Etched’s AI hardware is designed to deliver full systems, which the company calls ‘frontier inference clusters.’ These clusters are built to handle the complex task of inference, a critical step in AI processing that occurs after a user submits a prompt. The inference process is divided into two stages: prefll and decode. In the prefll phase, the system must understand the context of the prompt, while in the decode phase, the system generates output tokens, which are the actual answers users see.

Revolutionary Components

Etched has designed two new components from scratch to speed up the inference process. The first is a prefill chip that operates at low voltage, allowing it to pack more transistors without the typical heat problems associated with high-end AI chips. This enables the chip to process more tokens faster. The second component is a new type of memory and an interconnect for the decode process, which Etched calls cluster-scale memory.

Cluster-scale memory allows many chips to connect together and share a memory pool at a very fast, low latency. This results in higher speeds and lower costs, making Etched’s hardware a game-changer in the AI industry.

Debunking the Perception

Etched has long been associated with etching a particular model into its chips, leading to the perception that each chip is custom-designed to run one frontier model. However, this is no longer the case. Etched’s systems can run any frontier model, making them highly versatile and adaptable.

In a blog post announcing the new round, investment firm Jane Street said, ‘We tested the chip and are pleased with the early results. Etched’s unique approach to inference delivers the precision we will need to support our most demanding workloads. We’re excited to now have our own rack running in our datacenter.’

A Who’s Who of Investors

Etched’s investors include some of the biggest names in the industry, including Kleiner Perkins, Sequoia Capital, Andreessen Horowitz, Peter Thiel, Tiger Global, Bain Capital Ventures, Neo, Stripes, Primary, Positive Sum, Diffusion, Argo, and Blackstone.