Ayar adds another $150M for CPO build-out

Ayar Labs, the venture-backed developer of co-packaged optics (CPO) to assist the scale-up AI data center computation capabilities, says it has raised another $150 million as it looks to ramp production.

The latest support follows the San Jose firm’s $500 million series E round announced just over six months ago, and earlier backing from a “who’s who” of top-tier tech firms including AMD, Intel, MediaTek, and Nvidia.

“This new capital will support Ayar Labs’ continued transition to high-volume manufacturing, including investments in product development, validation, scaling the manufacturing ecosystem, and opening a new Bengaluru Design Center,” announced Ayar, which is aiming to deliver the highest performing and manufacturing-ready CPO solution for AI scale-up.

Indian expansion

CEO Mark Wade, who co-founded Ayar with CTO Vladimir Stojanovic just over a decade ago, remarked: “Copper interconnect is becoming the limiting factor for AI scale-up. This funding allows us to move faster on manufacturing-ready co-packaged optics at scale.

“We’re deepening our work across the foundry and packaging ecosystem and growing our engineering capacity to support customer programs worldwide.”

The new engineering hub in India will complement the firm’s existing presence at its Silicon Valley headquarters and in Taiwan, and its establishment will be overseen by Ayar’s new VP of silicon engineering Sankara Venkateswaran, alongside senior director of engineering Arun Balachandar.

“Our new Bengaluru Design Center supports our transition from technology development to commercialization and production,” said Venkateswaran.

“As customer demand and the complexity of our product roadmap increase, expanding our global engineering capacity will help us execute faster, support multiple development programs, and collaborate more closely with partners and customers across the region.”

Active component demand

Ayar’s approach is based around its “TeraPHY” optical input/output chiplet devices, produced by silicon photonics manufacturer GlobalFoundries. They can be combined with “SuperNova” multi-wavelength light sources to maximize data transfer for AI compute, while reducing costs, latency, and power consumption.

Boasting technology partnerships with the likes of Lockheed Martin, Nvidia, and data center cloud IT and infrastructure provider Wiwynn, Ayar sources its key active photonic components from suppliers including Lumentum and the Sivers foundry.

Sivers announced last week that it wasinvesting $30 million in indium phosphide (InP) laser production, with CPO demand a key driver behind that decision.

Earlier this year Lumentum’s CEO Michael Hurlston said that an “industry pivot” to adopt optics and by-pass the scaling limitations of copper was now under way.

“By late calendar 2027, we would expect our first scale-up CPO shipments replacing longer copper connections,” Hurlston told investors in February.