Fuelled by a multi-million-dollar funding round, Ayar Labs accelerates the production of co-packaged optics, targeting AI’s bandwidth bottleneck and training its sights on infrastructure scale-up.
US-based Ayar Labs has closed a $500 million Series E funding round, led by Neuberger Berman, to accelerate production of its co-packaged optics (CPO) solutions. The investment raises the company’s total funding to $870 million and values it at $3.75 billion.
The round brought together institutional investors, including ARK Invest, Insight Partners, Qatar Investment Authority, Sequoia Global Equities, and 1789 Capital, alongside strategic backers AMD, Alchip, MediaTek, and NVIDIA. Neuberger Berman will also take a board observer role, contributing expertise in scaling technology firms.
Chief Executive Mark Wade said the funding would help address growing inefficiencies in AI infrastructure, where copper interconnects have become a bottleneck.
“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,” he said.
The company’s TeraPHY optical engine lies at the core of its solution, designed to integrate seamlessly with existing accelerator and switch vendor systems. By replacing copper with optical connectivity, Ayar Labs aims to deliver the performance gains required for next-generation AI infrastructure.
The new capital will be used to expand high-volume manufacturing and testing capacity, strengthen ecosystem partnerships, and grow global operations, including a new office in Hsinchu, Taiwan. Strategic participation from MediaTek and Alchip Technologies is expected to deepen collaboration with custom ASIC design partners.
Gabe Cahill, Managing Director at Neuberger Berman, described data centre interconnect as the most critical challenge in the buildout of AI infrastructure.
He acknowledged further, “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.”
Ayar Labs stated that its CPO solution is positioned to support the rapid scale-up of AI systems, with investors signalling strong conviction in its ability to overcome bandwidth and efficiency barriers.
