Etched, a startup focused on developing custom ASICs for artificial intelligence workloads, has raised $500M in its latest funding round in an effort to enter an arena dominated by Nvidia’s (NVDA) GPUs, according to Bloomberg.
The funding round was led by Stripes with participation by Peter Thiel, a co-founder of PayPal (PYPL) and Palantir (PLTR), along with Positive Sum and Ribbit Capital, and has propelled the San Jose-based company to a $5B valuation, the report said.
Etched held a Series A funding round, led by Primary Venture Partners and Positive Sum, in 2024 that raised $120M.
Founded in 2022, its flagship product, Sohu, was produced by Taiwan Semiconductor Manufacturing (TSM) using its 4nm process. Because they are made to only run transformer AI models, unlike general-purpose GPUs, they are more efficient. It can handle AI models made by Google (GOOG)(GOOGL), Meta (META), Microsoft (MSFT), OpenAI (OPENAI) and Anthropic (ANTHRO).
“Sohu is an order of magnitude faster and cheaper than even Nvidia’s next generation of Blackwell GB200 GPUs when running text, image and video transformers,” said Etched CEO Gavin Uberti in an interview last year with TechCrunch. “One Sohu server replaces 160 H100 GPUs. … Sohu will be a more affordable, efficient and environmentally friendly option for business leaders that need specialized chips.”
Uberti co-founded Etched along with Robert Wachen and Chris Zhu. Other company executives include Brian Loiler, who worked for Nvidia for more than 20 years and helped develop its HGX and DGX systems. The team also features David Munday, formerly of Google DeepMind, and Ajat Hukkoo, who has engineering experience at Broadcom (AVGO) and Intel (INTC).