Ayar Labs Inc. has added $150 million to its Series E funding round, bringing the round to $650 million, the networking technology startup said. The additional capital came from an unnamed investor. The company first announced the $500 million round in March, led by Neuberger Berman, with Nvidia Corp., Advanced Micro Devices Inc. and MediaTek Inc. also participating.
That earlier round put Ayar Labs' total fundraising at $870 million, and the extension pushes its outside funding past the billion-dollar mark. The money reflects growing interest in the company's optical interconnect technology, which links artificial intelligence chips to fiber optic cables to move data faster inside AI clusters.
Ayar Labs aims to replace the copper interconnects widely used in AI data centers so that chip clusters and foundation models can grow larger. According to the company, copper has three main drawbacks: signals degrade over distance, the cables draw too much power when thousands of graphics processing units are wired together, and the wires overheat when attached to many high-performance processors, causing workloads to fail.
The company's answer is TeraPHY, a product that substitutes optical interconnects for copper. Ayar Labs says optics offer more bandwidth, better performance, greater power efficiency and lower latency, potentially connecting much larger GPU clusters across data centers. Ayar Labs has also built co-packaged optics technology that places its TeraPHY Optical Engine in a server's ASIC socket next to the GPU.
Co-founder and Chief Executive Mark Wade said copper interconnect is becoming the limiting factor for AI scale-up. He said the funding lets Ayar Labs move faster on manufacturing-ready co-packaged optics at scale, deepen work across the foundry and packaging ecosystem and expand engineering capacity for customer programs worldwide. Wade told Reuters the company hopes to reach the mass market by early 2028.
The Series E money has already funded a new chip design center in Bengaluru, India, and the extension will help Ayar Labs begin preparing its products. Wade said that because the company's optical chip goes into customer products, it must have everything qualified for volume production by the end of 2027 for customers ramping in the 2028-2029 timeframe. Founded in 2015, Ayar Labs did not raise significant capital until five years later, when it received $35 million.
The startup also has backing from Wiwynn Corp., a Taiwanese data center infrastructure company that made a strategic investment earlier this year; it is unclear whether that is the source of the extension. The two have worked on optically connected, rack-scale AI systems for hyperscale workloads, using SuperNova remote light source technology integrated into Wiwynn's rack-level server architecture. Wiwynn CEO William Lin said co-packaged optics is foundational for the next generation of AI and cloud data centers, and that the collaboration and investment offer a path to architectures that ease copper's power and complexity limits.
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