This article reports that Ayar Labs just closed a $500 million Series E round. The company plans to use this capital to ramp up production of its co-packaged optics (CPO) technology, aiming to scale up AI-ready data center interconnects.
It covers the funding details, key investors, and strategic partnerships. The article also touches on the technical path from TeraPHY I/O chiplets to multi-wavelength SuperNova light sources—all focused on overcoming copper interconnect bottlenecks in modern AI infrastructure.
Ayar Labs raises $500 million to scale co-packaged optics production
Ayar Labs is steering a major capital infusion into high-volume manufacturing and test capacity for its CPO solution. This Series E round totals $500 million and brings the company’s venture funding to roughly $870 million.
Momentum is building as Ayar moves to turn R&D breakthroughs into scalable production. The company is also expanding at a new office in Taiwan to strengthen its supply chain for optical components and packaging.
Neuberger Berman led the round, with a diverse set of investors and manufacturing partners joining in. This signals broad market confidence in CPO as a practical way to upgrade AI compute infrastructure.
Alchip Technologies is a new manufacturing partner, joining a group that already includes notable names across investment, semiconductor, and tech ecosystems.
What makes co-packaged optics (CPO) compelling for AI workloads
Co-packaged optics puts optical signaling right inside or next to the ASIC package. That move slashes data path length, latency, and energy per bit.
Ayar’s TeraPHY optical I/O chiplets, made by GlobalFoundries, pair with SuperNova multi-wavelength light sources. The company wants to boost data transfer rates for AI compute while cutting cost, power use, and heat—crucial as models balloon past trillions of parameters and workloads demand ever-faster connections between GPUs and accelerators.
The industry’s focus on data center interconnects (DCI) keeps growing, especially as dense GPU clusters need to avoid copper-related losses. Ayar’s approach tries to unlock thousands of GPUs acting as a single, more power-efficient system, tackling what execs call the “power wall” in AI infrastructure.
Strategic partnerships fueling scale and ecosystem
Ayar’s strategy leans heavily on a broad ecosystem of collaborations, not just funding. The company has long-standing technology partnerships with Lockheed Martin and Nvidia.
It sources photonic components from Lumentum and Sivers. Supplier relationships aside, Ayar has inked strategic deals with chip packager AIChip and foundry TSMC to support scaling up CPO production.
Investors and catalysts driving the journey
- Neuberger Berman (lead investor) – focusing on customer milestones and ecosystem integration
- Alchip Technologies – new manufacturing partner supporting volume production
- ARK Invest, Insight Partners, MediaTek, Qatar Investment Authority, Sequoia Global Equities, 1789 Capital – broadening the cross-sector investment network
These investors and partners seem to share a conviction that Ayar’s CPO pathway can help ease data center interconnect bottlenecks and speed up the deployment of AI workloads at scale.
Market implications: AI infrastructure and the data center power equation
Industry watchers see Ayar’s progress as just one part of a bigger move toward optically enabled AI systems. Copper interconnects are running out of steam as AI models get larger and inference needs explode.
By building optical signaling right into the silicon, Ayar aims for lower latency and less energy per bit. They’re hoping for higher bandwidth density too, which could mean faster training and more efficient inference for massive data centers.
The company’s plans for a Taiwan office and bigger test capacity show they’re serious about moving from research to real-world production. If Ayar hits its ambitious volume goals and keeps reliability on track, CPO might end up as a core tech for the next wave of AI accelerators and their networks.
Here is the source article for this story: Ayar Labs closes $500M venture round