AI chip startup Etched raises $300M, valued at $10B

In a spectacular and highly significant move of commercial consolidation and investment attraction in the global semiconductor and specialized AI hardware market, custom silicon chip startup Etched today officially announced a massive $300 million Series C funding round. The large-scale capital injection was led directly by renowned venture capital firm Sequoia Capital.

Decacorn status and new partners in the round

With the record fundraising, the market valuation of the San Jose, California-based startup reached the $10.3 billion mark, earning it decacorn status. The venture capital round also saw coordinated participation from renowned fund Andreessen Horowitz (a16z), Jane Street, Diffusion Capital, and South Korean ultra-high bandwidth memory giant SK Hynix.

Founded in 2022 by young entrepreneurs Gavin Uberti, Robert Wachen, and Chris Zhu, who dropped out of Harvard University to focus on the silicon company, the startup doubled its market value compared to its $5 billion valuation just seven months ago. According to market statistics shared by the lead manager, this valuation represents the highest ever recorded for a Series C round under its direct investment leadership.

The Sohu chip and dedicated processing advantage

Unlike general-purpose graphics processors and flexible acceleration GPUs, such as the H100 or Blackwell families developed by traditional Big Tech hardware companies, the startup bets on a dedicated semiconductor structural philosophy. Its main product is the Sohu, a custom ASIC chip physically designed exclusively to run inference on Transformer architecture models and diffusion neural network models.

By forgoing flexible logic circuits that manage the algorithm training phase, the integrated circuit achieves raw processing rates and latencies significantly lower than generic silicon. The tech company reported it has already secured over $1 billion in firm order contracts from corporate clients in the United States and Asia. The first integrated industrial racks containing the Sohu chip are expected to ship commercially in the second half of 2026.

Global market race against industry giants

The consolidation of new dedicated inference architectures drastically intensifies competition at the top of the cloud infrastructure market. The new company competes with tools developed internally by major providers, primarily represented by search giant Google and the hardware corporate divisions of Microsoft. The efficiency of ASIC chips is also being closely evaluated by major logical partners such as OpenAI.

High-speed optical switches and fast buses

Real-time operation and interconnection of thousands of dedicated Sohu processing chips installed in industrial server racks in local datacenters require extremely fast integrated physical buses and efficient network switches. The fast traffic of these data networks depends on controller processors and optical switches designed by specialized physical network designers, such as network chip maker Broadcom. The electrical cost reduction of local optical switches optimizes green data centers and reduces the electrical consumption of partner companies' computers in the IT market.