In December it was worth 5 billion dollars. In July it raised 300 million at an estimated valuation of 10.3 billion. This week the American chip manufacturer Etched announced a new round of 700 million dollars (about 640 million euros) at a valuation of 21 billion dollars. That is a doubling in a month and a jump of almost 11 billion within that same month.

The round is led by Jane Street - a quantitative fund that trades its own money and does not habitually invest in hardware startups. That is the part worth attention. Jane Street did not buy a pitch deck; its statement says it tested the chip and already has its own system installed in one of its data centres. „We tested the chip and are pleased with the early results”, the fund's announcement reads. An investor who uses the product first and pays for the company afterwards is a different story from an investor who gets in because everyone is getting in.

What exactly is Etched selling? Not individual chips, but entire systems the company calls „frontier inference clusters”. Nvidia calls the same thing artificial intelligence factories - which tells you who the competitor is.

The technical argument comes in two parts. Co-founder and chief operating officer Robert Wachen explains that inference - the computation that happens after a user sends a question - has two phases. „Inference is built in two phases, prefill and decode”, says Wachen. The first demands raw computing power to understand the question and the context; the second demands memory to push out the answer.

For the first phase Etched built a chip that runs at low voltage, which lets it pack in more transistors without the overheating that plagues other top-end hardware. For the second it developed a new type of memory and interconnect it calls cluster-level memory. „It allows many chips to be connected and use a shared pool of memory, very fast and with low latency”, says Wachen.

The company is still fighting its own past. At the start the idea was literally to etch a single model into the chip - hence the name. That is no longer the case, and Etched claims its systems run any frontier model. When a startup has to explain what it no longer does, it usually means the early story sold better than the product.

The investor list includes Kleiner Perkins, Sequoia Capital, Andreessen Horowitz, Peter Thiel, Tiger Global, Bain Capital Ventures and Blackstone. A doubling in valuation within a month is not explained by an improved product - the product is the same as it was in July. It is explained by how much money is looking for somewhere to sit.