The semiconductor startup secures fresh backing from Wiwynn, driving its valuation above $5bn as it races to replace copper connections.
Silicon Valley startup Ayar Labs has raised an additional $150 million in funding to support the development of optical interconnect technology designed to link artificial intelligence chips.
The extension brings the firm’s Series E round—initially announced in March as a $500 million raise—to $650 million raised this year. Taiwanese data centre equipment manufacturer Wiwynn joined existing high-profile backers including Nvidia, AMD, and MediaTek.
Ayar Labs specialises in co-packaged optics, a technology that uses fibre-optic cables rather than traditional copper wire to connect processors. The approach aims to eliminate the severe thermal and power bottlenecking caused by copper connections as AI workloads expand.
Chief Executive Mark Wade stated that the new capital enabled the company to open a chip design centre in Bengaluru, India, and will support qualification efforts ahead of commercial production.
“We build the optical chip, and our optical chip gets fed into our customer’s product,” Wade told Reuters. “If my customers’ products are looking to ramp in the 2028-2029 time frame, we have to have all of our stuff qualified for volume production by the end of the 2027 time frame.”
Alongside the primary funding extension, Antero Peak Group at Artisan Partners led a $225 million secondary share purchase alongside Sequoia Global Equities, ARK Invest, and Greycroft. The secondary transaction, which allowed early employees and investors to sell equity, valued Ayar Labs at more than $5 billion.
“From our perspective, the AI infrastructure and optical interconnect industry is at a major inflection point, with optical scale-up solutions poised to ramp through the end of the decade,” said Chris Smith, founding portfolio manager of the Antero Peak Group.
