Why it’s important: Ayar Labs, a pioneer in optical interconnect technology that harnesses light to transfer data between chips, has secured $155 million in Series D funding. The round was supported by semiconductor heavyweights Nvidia, AMD and Intel, pushing the startup’s valuation past $1 billion as it prepares for large-scale production.

Ayar Labs is making waves by scaling fiber optic data transmission technology down to chip scale. Its flagship product, the TeraPHY optical I/O chipset, delivers a staggering four terabits per second bidirectional bandwidth with ultra-low latency. Even more impressive, it achieves this by consuming just 10 watts or five picojoules per byte – a major breakthrough in power efficiency at such speeds. The chiplet integrates directly into advanced chip packages, replacing traditional electrical interconnects with cutting-edge optical solutions.

This innovation could be a game-changer for modern AI workloads, which demand enormous data throughput. The power-hungry GPUs that drive these workloads require advanced interconnects to eliminate system bottlenecks and reduce power consumption, making Ayar Labs’ technology essential for the next generation of computing.

Ayar Labs’ other key innovation is the SuperNova light source, which provides 16 wavelengths of light to power 16 ports and 256 data channels, delivering a total of 16 terabits per second of bidirectional throughput. Designed to complement TeraPHY chipsets in server systems, this solution delivers 5x to 10x higher bandwidth, 10x lower latency, and up to 8x higher power efficiency compared to traditional electrical interconnects.

“The AI ​​workload really breaks existing hardware, especially for interconnects,” said Mark Wade, CEO of Ayar Labs. “We found a way to replace these electrical interconnections.”

“Leading GPU vendors – AMD and NVIDIA – and semiconductor foundries – GlobalFoundries, Intel Foundry and TSMC – combined with support from Advent, Light Street and our other investors highlight the potential of our I/O technology. S optics to redefine the future. of AI infrastructure,” he said. added.

Although optical fiber has long been used for long-distance data transmission, the miniaturization of the technology at chip level constitutes a major technical feat. Ayar Labs has worked with manufacturers like GlobalFoundries and Intel to integrate its technology into high-volume chip production, and discussions are reportedly underway with TSMC, according to Bloomberg.

Wade revealed that customers are already testing TeraPHY chipsets, with high-volume qualification expected by mid-2026. The company plans to use the new $155 million Series D funding to scale up manufacturing and meet the growing demand for interconnect bandwidth for AI.

The funding round was led by Advent Global Opportunities and Light Street Capital, with significant contributions from Nvidia, AMD Ventures and Intel Capital – marking the collective endorsement of the “big three” chipmakers. Existing backers including Lockheed Martin Ventures, GlobalFoundries, Applied Ventures LLC and VentureTech Alliance also participated in the round.