Ayar Labs, a chip technology startup backed by Nvidia, has raised a fresh $500 million of funding to accelerate production of its optical chip technology, underlining continued investor appetite for infrastructure powering artificial intelligence.
The California-based company said the Series E round values the business at $3.75 billion. The funding was led by Neuberger Berman and saw Nvidia and AMD invest more and included new investors ARK Invest, Qatar Investment Authority and 1789 Capital.
Ayar's optical chips transmit data using light rather than traditional electrical signals, with the aim of moving information faster and more efficiently between AI computing chips and memory chips.
This faster transfer of data is becoming increasingly important as hyperscalers and governments pour hundreds of billions of dollars into AI infrastructure.
The company said it is aiming to speed up deployment of its co-packaged optics technology, which integrates optical connections directly alongside processors.
It plans to use the new capital to scale volume production, expand testing capacity and grow its global footprint, including at a new office in Taiwan.
Ayar rivals are companies such as Celestial AI, Lumentum and Coherent in a fast-growing market for high-speed data interconnects.
Yesterday, Nvidia agreed to invest $2 billion each in photonic product makers Lumentum and Coherent..