Nvidia AI chip competitor Etched issued a progress report on Tuesday, after TSMC successfully manufactured its chip earlier this year. The startup says it has already booked $1 billion in contract orders for its product: full systems powered by those chips.

Etched is currently in the process of testing that first product with customers. It calls these systems “frontier inference clusters,” bundles that include the chips along with custom-designed racks and software, all built to help frontier models run inference faster, more cheaply, and with better power efficiency than rivals, Etched claims. (Inference is what happens after a user submits a prompt — it’s currently the biggest bottleneck, and the biggest cost center, for AI companies trying to serve customers at scale, which is exactly why investors are paying attention to anyone promising to solve it.)

Etched, founded in 2022, also revealed that it has now raised a total of $800 million to date. The most recent tranche was an unannounced $500 million round closed in December at a $5 billion post-money valuation, the company said.

The startup has attracted a notable group of investors, too, including VentureTech Alliance, Jane Street, Hudson River Trading, Two Sigma, and Ribbit Capital. It has also secured angel investment from AI heavyweights including Andrej Karpathy, Geoffrey Hinton, Fei-Fei Li, Arthur Mensch, and Scott Wu. The cap table also includes billionaires Stanley Druckenmiller and Peter Thiel.

Although the startup’s press release frames Tuesday’s announcement as Etched “coming out of stealth,” co-founders — CEO Gavin Uberti and president Robert Wachen — have actually been talking to TechCrunch about their chip plans since 2024. Both dropped out of Harvard and became Thiel fellows to found Etched, as Uberti told TechCrunch at the time.

By 2024, Etched was already on investors’ radar, having raised more than $125 million. But on Patrick O’Shaughnessy’s “Invest Like the Best” podcast, the founders said that back in 2023, they struggled to get investors interested — even with a 30-page memo arguing that AI would eventually need specialized chips, not just general-purpose GPUs. Every major investor they pitched passed. The company was reportedly operating month-to-month, close to running out of cash, in those early days.

Today’s funding environment looks like a different planet by comparison. Investors are chasing everything AI-related, especially chip technology that speeds up inference. Competitor Cerebras had the first breakout IPO of the year, while AI chip maker Groq just raised $650 million. Hyperscalers Amazon, Google, and Microsoft all build their own in-house AI chips. Even OpenAI just announced its first custom chip, built by Broadcom.