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AI Chip Startup Etched Captures $120M In Hot Market

Illustration of money clip with $100 bills. became the latest startup to ride the wave of investor enthusiasm for AI chips.

The San Francisco-based startup locked up a $120 million round led by Positive Sum and Primary Venture Partners.

The startup is the creator of the transformer-specialized AI chip Sohu, used to train and deploy large language models that are the underpinning of generative AI.

Etched has announced a partnership with Taiwan Semiconductor Manufacturing Co. to produce the chip, which will be a direct competitor to chip giant Nvidia — which dominates the market in AI.

However, the large energy consumption of AI remains a concern, and Etched believes it can provide a more cost-effective and energy-efficient chip that is faster.

Semi explosion

Etched is just the latest chip startup to raise big. Venture funding to semiconductor chips appears well on its way to bouncing back this year after a forgettable 2023. Thus far in 2024, VC-backed chip startups have raised nearly $5.3 billion in just 175 deals, per Crunchbase data.

Last year, startups saw less than $8.8 billion in 490 deals. In 2022, chip startups locked up almost $10.9 billion in 447 deals.

Some big deals in 2024 include:

More big rounds could be on the way, as it was recently reported smartphone-maker Samsung is leading a round of at least $300 million for Toronto-based AI chip startup Tenstorrent.

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Illustration: Dom Guzman

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