A chip startup once viewed by investors as too inexperienced to take on the semiconductor industry is now pulling engineers from Nvidia and other major chip companies, as it moves closer to becoming a serious player in AI hardware. Etched, founded by three 24-year-old Harvard dropouts, has signed quantitative-trading firm Jane Street as its first customer, booked more than $1 billion in orders and started shipping its AI chips. The hiring trend has also surprised some of its new employees. Former Nvidia systems engineer Anthony Gamerman said he kept hearing about colleagues leaving Nvidia for Etched. âOne leaves, and then another one, you hear a couple weeks later, and you go, âWhoa, I canât believe so-and-so is heading over to Etched,ââ he said.

Investors once warned âDonât back the kids in chipsâ

Etched was started by Robert Wachen, Gavin Uberti and Chris Zhu, who are all 24 years old. The company initially struggled to attract investors because of the founders' limited experience in semiconductor hardware.

Sonya Huang, a general partner at Sequoia Capital, described the concern among investors at the time. âAmong tech investors, the prevailing wisdom was âdonât back the kids in chips,ââ Huang said.

She added that investors believed young founders could succeed in internet businesses but faced much bigger challenges when building semiconductor hardware.

Etched has since raised nearly $2 billion, including a new $700 million funding round led by Jane Street that values the company at $21 billion.

Etched is hiring from Nvidia

The startup has built a team with significant semiconductor experience. Around 15% of its roughly 400 employees previously worked at Nvidia, according to Etched. The company has also hired engineers from other established semiconductor firms.

Brian Loiler, who spent nearly 23 years at Nvidia, joined Etched to work on its servers and racks. He has since helped recruit about a dozen Nvidia engineers to the startup, with some turning down counteroffers. Jimmy Daley, a former Nvidia vice president of data-center systems engineering who retired in July, is also an investor in Etched.

The company has developed AI processors designed specifically for this workload. Its first customer is Jane Street, a quantitative trading firm that uses powerful computing systems to run trading models quickly. Etched says it has already started shipping its chips and took just 44 days to get its test chips running inference workloads after receiving them from Taiwan Semiconductor Manufacturing.

âWe may be the only AI chip that was built by a startup that was successful on the first try,â Etched co-founder and president Robert Wachen said.