Ayar Labs Raises $155M from Intel, Nvidia, AMD

Ayar Labs, a leader in optical data transfer technologies, has attracted major investments from three of the top semiconductor design firms in the U.S. as the industry seeks more efficient AI processing solutions. Headquartered in San Jose, California, the company raised $155 million in a funding round led by Advent Global Opportunities and Light Street Capital, with participation from Nvidia, AMD Ventures, and Intel Capital. According to Ayar Labs co-founder and CEO Mark Wade, the company is now valued at over $1 billion.

The surge in artificial intelligence (AI) applications has highlighted the power-intensive and costly nature of current technologies. At the forefront of AI processing are Nvidia's graphics processing units (GPUs), which are designed to handle multiple tasks simultaneously. However, this requires rapid and continuous data transfer across server systems, often resulting in bottlenecks that consume large amounts of power and generate significant heat. Ayar Labs addresses these challenges by leveraging photonic (light-based) solutions to accelerate data transfer.

"AI workloads are indeed pushing the limits of current hardware infrastructure, especially in terms of interconnects," said Mark Wade. "We've developed a method to replace these electrical interconnects with optical solutions."

For decades, light has been used for data transmission, such as in the undersea cables connecting continents. Ayar Labs has miniaturized this technology to integrate it into chip packaging, enabling faster, more efficient data transfer within chips themselves.

Customers are already testing Ayar Labs' photonic chips, with the company targeting full-scale production by mid-2026. Wade explained that the new funding will be used to scale up production capabilities.

Currently, Ayar Labs' chips are manufactured by GlobalFoundries (GF), with the company also collaborating with Intel to integrate its technology into Intel's manufacturing processes. Ayar Labs is in talks with leading industry players, including Taiwan Semiconductor Manufacturing Company (TSMC), to further advance its technology.

Ayar Labs' existing investor, VentureTech Alliance, has formed a strategic partnership with TSMC. TSMC is one of the founding members of the Silicon Photonics Industry Consortium, established this year to accelerate the adoption of photonics technologies, including chip packaging.