Etched, the AI chip startup, is reportedly entertaining investment offers valuing the company at between $40 billion and $50 billion, more than doubling its $21 billion valuation from just two months ago. These offers come shortly after Etched’s $700 million funding round led by quant trading firm Jane Street, which is also a customer. The early-stage talks may evolve, but if Etched raises a sum similar to its last round, it could secure enough capital to operate for approximately 3.5 years.

The company’s rapid valuation surge reflects its focus on a costly segment of the AI industry: creating complete AI hardware systems centered around its custom chips. Etched claims that its chips deliver faster and more cost-effective inference processing compared to Nvidia, a critical performance metric in AI computing. Its engineering team is heavily composed of former Nvidia employees, fueling investor confidence due to deep industry expertise.

Etched’s business momentum is evident in its $1 billion in customer orders as of July and the production of a test chip at TSMC’s fabrications facility. The startup also runs a 10-megawatt data center in Silicon Valley and coordinates manufacturing efforts from Taiwan. Founded by Gavin Uberti and Chris Zhu, who met at Harvard, the company has navigated aggressive funding rounds with Sequoia leading a $300 million raise in July, followed by the $700 million round in September.

The startup’s ability to attract significant capital quickly highlights a trend in doublesized or back-to-back funding rounds among high-profile tech companies, where financing is split into multiple tranches with escalating valuations. With fierce competition against industry leaders like Nvidia, Etched’s unique approach to chip design and system integration has made it an appealing target for top-tier investors eager to capture a stake in the evolving AI hardware market.