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03 Mar 2026
Series E fundraising will support move to volume production for co-packaged optics technology.
Ayar Labs, the Silicon Valley company that has pioneered the development of co-packaged optics (CPO) for data center connectivity, has completed a $500 million funding round that should see it move the technology to volume production.
Bringing total venture support for the startup to $870 million, the series E round was led by Neuberger Berman, with participation from new investor and Ayar manufacturing partner Alchip Technologies, alongside ARK Invest, Insight Partners, MediaTek, Qatar Investment Authority (QIA), Sequoia Global Equities, and 1789 Capital.
“The company will use the funds to scale high-volume production and test capacity to accelerate the deployment of its CPO solution,” announced Ayar, with some of that activity set to take place at the firm’s new Taiwan office.
Embedded optics
Established in 2015 by CEO Mark Wade and CTO Vladimir Stojanovic, Ayar took part in the US Defense Advanced Research Project Agency (DARPA) “PIPES” program to embed optical signaling technologies within the package of application-specific integrated circuits (ASICs), developing what has since emerged as CPO technology that is tipped to replace copper interconnects in data center infrastructure.
The firm’s “TeraPHY” optical input/output chiplet devices, produced by silicon photonics manufacturer GlobalFoundries, are combined with its “SuperNova” multi-wavelength light sources to maximize data transfer for AI compute, while reducing costs, latency, and power consumption.
As well as raising hundreds of millions of dollars in venture support over the past decade, Ayar has signed technology partnerships with the likes of Lockheed Martin and Nvidia, while Lumentum and the Sivers foundry supply it with key active photonic components.
Last year the firm also established a strategic partnership with chip packager AIchip and semiconductor foundry giant TSMC, both based in Taiwan, to scale up CPO production.
Paradigm shift
Commenting on the latest funding, Wade said: “AI infrastructure is hitting a power wall driven by interconnect inefficiency. As bandwidth demands explode, copper becomes the bottleneck - consuming too much power and limiting AI throughput per watt and per dollar.
“Co-packaged optics overcomes these barriers, enabling thousands of GPUs to operate as a unified system. This funding fuels our ability to meet the demands of hyperscale AI.”
Neuberger Berman managing director Gabe Cahill added: “Today’s AI infrastructure buildout is one of the largest capital deployment opportunities of our generation, and data center interconnect has quickly emerged as the most critical bottleneck.
“Ayar Labs’ execution against key customer milestones is driving strong market conviction in its technology leadership. We believe that both ongoing and new strategic investments from industry leaders in this round reinforce this momentum.
“With a production-ready scale-up co-packaged optics solution and deep ecosystem integration, we are excited to lead this round and help accelerate the paradigm shift taking place in AI infrastructure.”
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