Etched, an AI chip startup founded by three Harvard dropouts in 2022, has closed a $300 million Series C funding round at a $10.3 billion valuation. The company, which has grown rapidly since its inception, now stands as one of the most valued startups in the AI hardware space.

The funding round was led by Sequoia, with Andreessen Horowitz, SK Hynix, Jane Street, and Diffusion Capital also participating. The company has attracted high-profile investors, including Peter Thiel, Andrej Karpathy, Dylan Field, and Amjad Masad, who have backed its mission to develop specialized AI chips.

The $300 million Series C round values Etched at $10.3 billion, a significant jump from its previous valuation. The company recently opened an 80,000-square-foot facility near its San Jose, California headquarters to expand production and prototyping, signaling its commitment to scaling operations.

The valuation highlights the growing demand for specialized AI chips, which are critical for training and deploying large language models and other AI applications. However, such high valuations also raise questions about long-term sustainability, vendor lock-in, and the ability of startups to compete with established semiconductor firms.

Etched’s rapid growth and high valuation underscore the intense competition in the AI chip market. As the company scales, it will need to navigate challenges such as maintaining technological innovation, managing production costs, and ensuring that its chips meet the evolving needs of AI developers and enterprises.