- Etched has raised $300 million at a $10.3 billion valuation, doubling its value since December and setting a new record for a Sequoia-led Series C.
- In 2023, Etched’s three founders, all Harvard dropouts, were turned down by most major investors before finally gaining Sequoia’s support in this round.
- New investors SK Hynix and Jane Street joined this round, bringing Etched’s total funding to more than $1.1 billion in under four years.
Etched raised $300 million in its Series C round at a $10.3 billion valuation, doubling its value in just seven months. Sequoia Capital led the round, with Andreessen Horowitz, Jane Street, Diffusion, SK Hynix, and existing investors Peter Thiel and Jump Trading also participating. Etched says this is the highest valuation ever for a Sequoia-led Series C.
“Now is the time to be aggressive. Our chips work, people want them, and it’s time to ship,” says Gavin Uberti, co-founder and CEO of Etched.
The AI inference chip market is expected to grow from $17.73 billion in 2025 to $20.51 billion in 2026, and reach $36.97 billion by 2030. The San Jose, California-based startup plans to take market share from Nvidia by offering specialised inference hardware instead of general-purpose GPUs.
From rejection to a record-breaking round
Tech Funding News has tracked Etched’s journey from its $120 million Series A in 2024, through a $500 million round at a $5 billion valuation in December 2025, to a January 2026 feature on its rise from a struggling startup to a $5 billion Nvidia competitor.
Uberti, Chris Zhu, and Rob Wachen, three Harvard dropouts and Thiel Fellows, founded Etched in 2022 to develop chips for AI inference. Sequoia turned down the founders’ detailed proposal for dedicated inference silicon for years, and most major investors also passed.
The Silicon Valley company ran on limited resources until Primary Venture Partners and Positive Sum Ventures backed its Series A. Sequoia finally invested in this round after Etched’s hardware moved from concept to real-world use with customers.
“We tend not to celebrate fundraises. We have a lot of work to do to get to Gigawatt scale. We’re excited to partner with the best AI infrastructure investors in the world to get there faster. The team is working around the clock with our early customers to bring our first product to life. We’re super excited,” says Wachen, co-founder and president of Etched.
What Etched builds and who it competes with
Etched builds rack-scale inference clusters instead of using general-purpose GPUs. Its systems support large mixture-of-experts models like DeepSeek and Qwen, as well as non-transformer architectures like Mamba, so customers are not limited to one model design.
The main technologies are Low Voltage Inference, which boosts computing power without using more energy, and Cluster Scale Memory, which shares SRAM and HBM across a cluster. This allows customers to run different model types on one system, so they do not need separate GPU clusters.
The competitive landscape has changed quickly in 2026. Cerebras went public in May 2026 at nearly a $56 billion valuation, making it the largest US tech IPO since Snowflake in 2020. Nvidia bought Groq for about $20 billion in December 2025, and Microsoft-backed d-Matrix raised $275 million at a $2 billion valuation around the same time.
While Cerebras makes wafer-scale chips and Groq’s technology is now part of Nvidia, Etched stands out by staying independent and supporting more than ten different model families.
“We have spent years studying the space and waiting for a company with the technical ambition, operational excellence, and execution required to define it. Etched is that company,” says Sonya Huang, a partner at Sequoia Capital.
The bill and what’s next
The new funding will pay for an 80,000-square-foot prototyping facility in Milpitas and an in-house surface-mount technology line, which will work alongside Etched’s factory in Taiwan. The company now has about 400 employees, up from just 35 in 2024.
With this round, total funding is now over $1.1 billion, following a $500 million round in December 2025 that valued Etched at $5 billion. Sequoia has invested in companies like Airbnb and Stripe before, but this is its first major investment in inference hardware at this scale.
Etched went from being seen as unfundable to landing Sequoia’s largest Series C deal in less than three years, all without major changes to its strategy. The big question now is whether this approach will still work if the next big breakthrough in the industry is very different from today’s transformer architectures.
