Etched - Building AI Hardware to Make Inference Faster and Cheaper

**Patrick O'Shaughnessy** (0:00)
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Hello and welcome everyone. I'm Patrick O'Shaughnessy and this is Invest Like the Best. This show is an open-ended exploration of markets, ideas, stories, and strategies that will help you better invest both your time and your money. If you enjoy these conversations and want to go deeper, check out Colossus, our quarterly publication with in-depth profiles of the people shaping business and investing. You can find Colossus along with all of our podcasts at colossus.com.

**SPEAKER_2** (1:53)
Patrick O'Shaughnessy is the CEO of PositiveSum. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of PositiveSum. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of PositiveSum may maintain positions in the securities discussed in this podcast. To learn more, visit PSUMVC.

**Patrick O'Shaughnessy** (2:21)
My guests today are Gavin Uberti and Rob Wachen, the founders of Etched. A few years ago when they set out to build a better AI chip than the largest companies in the world, almost everyone I called told me it could not be done. They've since done it, taping out a working chip on their first attempt and becoming the first hardware company founded after ChatGPT to do so. They already have more than a billion dollars of customer demand for their first product and have raised $800 million to build it. Edge to build chips and systems designed to run AI models faster and at lower cost. They started the company in 2023 and the product is a complete rack for Inference. The chip, along with the boards, the power delivery, the interconnects and all the manufacturing to produce it all.
We talk about the technical bets behind their architecture, how they hired industry legends and paired them with elite 22-year-olds and why they believe Inference will become one of the largest markets in the world. I think you will find the story of what they have built hard to forget. Please enjoy my conversation with Gavin and Rob.
All right, gentlemen, it's been three years or so, Gavin, since you and I last did this, which is nuts. And at the time, I was just wildly intrigued by your story and what you were going to build. I didn't know a lot about chips at the time. I was considering investing in the company, and so I was calling everyone I could conceive of that could give me an opinion or something.
And at the time, basically, the consensus was these kinds of companies are not built by young people, that the semis world, the best companies are founded by 40, 50-year-old people that have had a whole career's worth of experience, have learned all the problems, have shipped multiple chips. Two 21-year-olds are like, not going to do this. It's just not going to work. It was indicative of a theme which was nobody believes in us. That's obviously changed a lot now, you know, just walk the halls and talk to the people that have chosen to come work here. But in the early days, it felt like this was something that you had to face down. What was that like facing that down, for a set of incumbents and an industry worth of people and investors and everyone else sort of didn't believe in you? And what did that anneal in you to build the company the way that you are? Like what was the impact of that?