nEye Systems lands $80M to scale optical circuit switching

nEye Systems, a California-based startup founded by photonics researchers at Berkeley, has raised $80 million in a series C round of venture financing.

Also known as “nEye.ai”, the company is the latest to target the rapidly growing area of data center interconnects, claiming that its optical circuit switch (OCS) technology fuses silicon photonics with MEMS to yield ultra-low latency, high-bandwidth, and power-efficient optical links.

The latest fundraising was led by Sutter Hill Ventures, with additional contributions from the venture units of Alphabet and Microsoft. It follows prior funding rounds of $14 million in 2023 and $58 million a year ago, bringing the total raised so far to $152 million.

Flexible pooling

According to a release announcing the latest financial support, it will enable the company to accelerate the development and high-volume manufacturing of nEye’s proprietary switches.

“As AI gigawatt factories emerge as the standard for large-scale compute, the industry is shifting toward composable infrastructure,” stated the firm.

“nEye’s technology introduces compact, fast-switching optical layers that allow for the flexible pooling of CPU, GPU, and memory resources, ensuring data center architectures can evolve alongside rapidly advancing AI models.”

nEye emerged from the work carried out by Ming Wu’s Berkeley research group. A professor of electrical engineering and computer sciences, Wu previously founded Optical Micro Machines (OMM) and the optical tweezers pioneer Berkeley Lights.

Wu co-founded nEye with Tae Joon Seok, a professor at Gwangju Institute of Science and Technology in Korea who carried out post-doctoral research at Berkeley. Wu is now the startup’s chief scientist, with Joon Seok holding the CTO role.

Foundry model

Heading up the firm is CEO Ashish Vengsarkar, an optical networking entrepreneur who started his career at Bell Labs and has held senior roles at Molex and Google.

“While this milestone validates our technology, our focus now shifts to scaling our foundry-based manufacturing and meeting the rigorous performance standards our customers demand,” said Vengsarkar.

Stefan Dyckerhoff, who is the managing director at Sutter Hill Ventures and will now join the nEye board, added:

"The market for OCS is projected to surpass $3 billion within the next three years. By moving away from complex mechanical assemblies to a foundry-compatible wafer-scale process, nEye is positioned to deliver the most cost-effective, high-performance switching solution for scale-up, scale-out and scale-across applications."

James Luo, a general partner at Microsoft-affiliated CapitalG, commented: “Optical switching is now a requirement to unlock the true potential of AI training and inference at scale.

“We are doubling down on nEye because their 'OCS-on-a-chip' approach offers a unique path to meeting the extreme density and power constraints of modern hyperscale data centers.”