AI startup Etched raises $120 million to develop specialized chip

By Max A. Cherney

SAN FRANCISCO (Reuters) - Artificial-intelligence startup Etched said on Tuesday it has raised $120 million in a series-A funding round that the company plans to use to further develop its specialized chip.

The San Francisco-based company aims to make a specialized processor tuned to run a specific kind of AI model that is widely used by OpenAI’s ChatGPT and Google Gemini.

Nvidia dominates the market for server AI chips, capturing roughly 80% of sales, according to estimates. Nvidia’s general-purpose AI chips are capable of handling a range of computing applications, but can use more energy than processors designed to perform specific functions. Nvidia is the largest U.S. company by market value.

Etched said backers in the funding round include former PayPal CEO Peter Thiel and Replit CEO Amjad Masad.