Etched, co-founded by three Harvard dropouts in their early 20s, has rapidly raised nearly $2 billion for its semiconductor startup. Unlike typical AI software ventures, Etched builds AI processors optimized for rapid inference computing. Sequoia Capital's Sonya Huang noted the prevailing wisdom was "don't back the kids in chips," but the firm led a $300 million Series C round.

The startup reached a key milestone signing Jane Street, the secretive Wall Street quantitative-trading giant, as its first customer for server racks filled with its AI processors. Etched has booked more than $1 billion in orders and started shipping chips. Jane Street is leading a new $700 million funding round valuing Etched at $21 billion, surpassing the $20 billion Nvidia paid for Groq.

Investors include Kleiner Perkins, Andreessen Horowitz, Tiger Global, Bain Capital Ventures, Neo and Blackstone. Etched took just 44 days after receiving test chips from Taiwan Semiconductor Manufacturing to run inference workloads—a process typically taking six months. "We may be the only AI chip that was built by a startup that was successful on the first try," said co-founder and president Robert Wachen.