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17 Dec 2024
AMD, Intel, and Nvidia return to join $155M series D funding round intended to revolutionize AI computing infrastructure.
Ayar Labs, the Silicon Valley startup at the forefront of high-speed optical interconnect development, says it has raised another $155 million in venture support as it looks to accelerate a move to volume production.
Supported by big-hitter chip manufacturers in the form of Intel, AMD, and artificial intelligence (AI) pioneer Nvidia, the series D round brings total investment in the San Jose firm to $370 million.
Ayar’s high-speed optical links are seen as a potential solution to the AI data center “bottleneck” caused by both conventional electrical interconnects and existing optical solutions.
Referring to a recent study by Goldman Sachs, Ayar stated: “AI infrastructure is projected to see more than $1 trillion in investments over the next decade, highlighting the critical need for solutions that eliminate bottlenecks created by traditional copper interconnects and pluggable optics.”
Venture firms Advent Global Opportunities and Light Street Capital led the latest round, with new backers 3M Ventures and Autopilot also now on board.
They join earlier investors including US defense contractor Lockheed Martin, which backed Ayar in 2020, as well as key player GlobalFoundries and several other venture supporters.
High-capacity communications
Established in 2015, Ayar emerged from a decade-long collaboration between researchers at the Massachusetts Institute of Technology (MIT), UC Berkeley, and Colorado University in Boulder, supported by funding from the US Defense Advanced Research Projects Agency (DARPA) via its “POEM” development effort.
Short for “photonically optimized embedded microprocessors”, POEM’s aim was to demonstrate photonic technologies that could be integrated within embedded microprocessors to provide seamless, energy-efficient, high-capacity communications within and between microprocessors and DRAM memory chips.
Applications were originally envisaged in military platforms like drones and satellites, where extreme performance and low size and weight are at a premium, but since the advent of AI expectations have shifted towards data center deployments.
Mark Wade, who co-founded Ayar as the startup’s president and chief scientist before stepping up to CTO and, since December 2023, the CEO role, said in a company release:
“The leading GPU providers - AMD and Nvidia - and semiconductor foundries - GlobalFoundries, Intel Foundry, and TSMC - combined with the backing of Advent, Light Street, and our other investors underscores the potential of our optical I/O technology to redefine the future of AI infrastructure.
“We are incredibly fortunate to have the backing of Light Street’s deep expertise in technology-specific investments as well as Advent’s robust private and growth equity background in this funding round.”
Growth potential
The latest funding is expected to enable Ayar to move its optical interconnect technology, which relies on silicon photonics, to scale.
The firm is currently looking to hire for numerous roles in photonics-related engineering, including a principal engineer for optical interconnect product development, and senior staff engineers for its laser modules and photonics integration.
Jordan Katz, a partner at Advent Global Opportunities who will now sit on Ayar’s board of directors, said that the company’s approach offered “transformative” benefits to AI systems, stating:
“We believe optical I/O is on the cusp of revolutionizing the future of AI infrastructure, and we recognize the significant growth potential of in-package optical interconnects.”
Anand Kamannavar, global head at Applied Ventures, added: “Ayar Labs plays a key role in helping solve the critical challenge of moving vast amounts of data efficiently across chips and data center systems.”
According to analysts at Yole Intelligence Ayar has emerged as a major player in optical interconnects over the past few years, establishing strong development partnerships with the likes of Nvidia, Intel, GlobalFoundries, and Hewlett Packard Enterprise.
Another startup to have raised significant funding in recent years for similar technology is Celestial AI. The Santa Clara firm closed a series B round worth $100 million in July 2023, and attracted a further $175 million earlier this year.
Its “Photonic Fabric” approach, based around what it calls an “optical multi-chip interconnect bridge”, is said to allow connectivity from any point on one die to any point on another die.
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