A chip startup most Americans have never heard of just became one of the most valuable private companies in tech — twice over in a single month. Etched, a San Jose-based maker of AI inference chips, announced Tuesday it has raised $700 million in fresh funding at a $21 billion valuation, according to a report from TechCrunch.

The round was led by Jane Street, the secretive Wall Street trading firm known more for options algorithms than semiconductor bets. Kleiner Perkins, Sequoia Capital, Andreessen Horowitz, Tiger Global, Bain Capital Ventures, Blackstone and Peter Thiel also piled in, according to SiliconANGLE's writeup of the deal.

Doubling, then doubling again

The numbers tell the real story. Etched was valued at just $5 billion last December. A $300 million Series C in July, backed in part by Nvidia, pushed that to roughly $10.3 billion. Now, barely a month later, the valuation has doubled again to $21 billion — a nearly $11 billion jump in about 30 days, one of the fastest value run-ups of the current AI boom.

Founded in 2021, Etched started out building chips tailored to a single AI model architecture before pivoting to what it now calls "frontier inference clusters" — hardware built specifically to run AI models after they've already been trained, rather than to train them. The company says its custom silicon uses low-voltage math blocks and a proprietary cluster-scale memory system to cut the cost and latency of running large models in production.

IT TOOK US THREE YEARS TO DELIVER OUR FIRST RACK FROM SCRATCH. OUR NEXT ONE WILL BE MUCH FASTER.

Jane Street isn't just an investor — it's also Etched's first paying customer, having installed one of the startup's racks in its own data center after testing the hardware. "We tested the chip and are pleased with the early results," the firm said, according to reporting cited by Reuters via TradingView. Etched's first prototype chip reportedly rolled off a Taiwan Semiconductor Manufacturing Co. production line earlier this year, and the company runs a 2-megawatt test cluster at its San Jose headquarters for prospective customers to try before they buy.

The mega-round lands the same day broader chip stocks had a brutal session on public markets, with the Philadelphia semiconductor index sliding more than 5% and names like Western Digital, SanDisk and Marvell all posting steep losses. The contrast underscores how private AI-infrastructure bets are still commanding premium valuations even as public chip names wobble on rate and inflation fears.

Etched now joins a small club of AI hardware startups — alongside the likes of Cerebras and Groq — racing to challenge Nvidia's dominance of the inference market specifically, betting that purpose-built chips can beat general-purpose GPUs on cost-per-token as AI usage scales.