Decade-old chip upstart Ayar Labs just collected $500 million investment.
The outfit backed by Nvidia and AMD says the Series E values it at $3.8 billion as of 2 March 2026.
Investors include Neuberger Berman, MediaTek and Qatar Investment Authority, with Alchip Technologies, ARK Invest, Insight Partners, Sequoia Capital and 1789 Capital also piling in.
For those not in the know, Ayar Labs is pushing co-packaged optics, the nerdy corner of silicon photonics that aims to replace copper links with fibre so data moves as photons.
The pitch is that less energy is burned shunting bits around server racks, more of that power going into the AI processor doing the work.
Ayar Labs, chief executive, Mark Wade said: “We’re solving one of the biggest hardware issues that’s causing bottlenecks in AI. We’ve been working on our core technologies for 15 years. We predicted that there would come a point in the 2020s or 2030s where copper connectivity would become a limiter on computing productivity.”
The company claims its interconnect chips deliver between 4-20 times the computing throughput per watt compared to copper.
Nvidia has been hammering at efficiency for inference, the compute that lets models answer user queries, and it already has NVLink pushing high-speed copper between chips.
Neuberger Berman, managing director, Gabe Cahill said: “People stay on copper for as long as they can, but the more electrons you run through copper, it starts to lose its fidelity. Using light is a step function forward.”
Cahill reckons there is a “phenomenal opportunity” for an IPO soon, which is banker-speak for seeing a hot exit while the AI hype is still paying.
Intel’s former CEO, Pat [kicking] Gelsinger, said: “I proudly declared that the death of copper was upon us, and everything would switch to optics, but I was just two decades too early. The GPU is sitting there sucking on a straw for more compute. Everyone wants their clusters to be bigger, but the physics of copper is limiting how big they can get,” Gelsinger said.
The tech has dragged because of thermal headaches and the finicky packaging needed to put optical links alongside silicon without it all going sideways.
“What makes Ayar Labs so special is they’ve solved all these problems and are ready to go into high-volume production,” Gelsinger said.
