AI chip startup Etched is receiving funding offers that could value the company at between $40 billion and $50 billion, just months after its valuation reached $21 billion, according to TechCrunch.
The San Jose, California-based company is reviewing bids from investors ranging from about $40 billion from top-tier firms to as much as $50 billion from lesser-known backers, TechCrunch reported on Oct. 5, citing people familiar with the matter. The talks remain at an early stage, and terms could change or no deal may ultimately be completed. Etched declined to comment.
READ: How 3 Harvard dropouts ‘Etched’ a $20 billion company in just 4 months (August 19, 2026)
The potential financing would mark another sharp increase in Etched’s valuation. The startup raised $700 million at a $21 billion valuation in September, after securing $300 million at a $10.3 billion valuation in July. Its valuation was therefore more than doubled in less than two months.
Etched is developing specialized AI hardware designed to accelerate inference, the computing process that generates responses after an AI model receives a prompt. The company says its systems can process more tokens at lower costs than Nvidia’s chips, putting it among the startups seeking to challenge Nvidia’s dominance in AI computing.
The company’s technology focuses on two components developed specifically to improve inference performance. Etched said its approach can increase processing speeds while reducing costs, an important consideration as companies deploy increasingly large AI models and face rising computing demands. Investor interest has also been supported by early customer activity. Quantitative trading firm Jane Street led Etched’s $700 million September funding round and is also a customer that has received an early Etched system. The startup said in July that it had secured more than $1 billion in customer orders after manufacturing its test chip at a Taiwan Semiconductor Manufacturing Co. facility.
Etched has grown to about 400 employees, with roughly 15% of its workforce having previously worked at Nvidia, according to The Wall Street Journal as cited by TechCrunch. The company also operates a new 10-megawatt data center in Silicon Valley and has established a facility in Taiwan to coordinate production near TSMC.
READ: Nvidia rival Etched secures $1 billion in AI chip system orders (July 1, 2026)
The startup was founded by Gavin Uberti, Chris Zhu and Robert Wachen, who left Harvard to build the company. Etched has rapidly increased its capital base as demand for AI infrastructure has accelerated.
The funding interest comes amid a broader race to develop alternatives to Nvidia for AI workloads. Reuters reported in August that Etched’s $21 billion valuation followed a $700 million funding round led by Jane Street, with investors including Kleiner Perkins, Sequoia, Andreessen Horowitz and Tiger Global. Reuters also reported that Etched had more than $1 billion in customer contracts at the time.
If Etched completes a new round near the reported $40 billion valuation, it would represent another major step up for a company that was valued at $10.3 billion in July. However, the reported offers are not yet a completed financing, and the final valuation could be different.