Ayar Labs, backed by chip giants, extends funding round by $150 million

By Stephen Nellis

SAN FRANCISCO, Sept ‌10 (Reuters) - Ayar Labs, ​a Silicon ​Valley startup developing a way to link AI chips directly together with optical connections, on Thursday said it has raised an additional $150 ‌million.

The fresh capital is an extension of a series E $500 ⁠million funding round the company announced in March. Ayar, which has backing from chip giants Nvidia, Advanced ‌Micro Devices and MediaTek is ‌developing co-packaged optics, a technology that can link AI chips together with fiber optical cables and avoid the overheating issues that arise when linking ​those chips with shorter copper cables.

Ayar and others in the chip industry are racing to get the optical technology to market as early as ⁠2028. Ayar CEO Mark Wade said the additional funding has helped it open a chip design center ​in Bengaluru, India, and will help prepare its products by the end of next year.

"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."

Taiwanese cloud data center equipment maker Wiwynn Corp joined Ayar's backers, bringing Ayar's ⁠total raised this year to $650 million.

At the same time Ayar Labs extended its series ​E round, Antero Peak Group at Artisan Partners led a secondary share purchase of $225 million from early employees and investors that valued Ayar at more than $5 billion. Sequoia Global ‌Equities, ARK Invest, and Greycroft took part in that transaction.

“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," ‌Chris Smith, founding portfolio manager ​of the Antero Peak Group at Artisan Partners, said in a statement.

(Reporting by Stephen Nellis in San Francisco; editing by ‌Lincoln Feast.)

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