Ayar Labs Secures $500M Series E to Accelerate Optical Interconnects for AI Infrastructure

Ayar Labs has raised $500 million in Series E funding, bringing its valuation to $3.8 billion, as the company accelerates the transition from copper-based interconnects to optical solutions for AI infrastructure.

The round attracted leading institutional and strategic investors, including Neuberger Berman, MediaTek, Qatar Investment Authority, Alchip Technologies, ARK Invest, Insight Partners, Sequoia Capital, and 1789 Capital. Industry leaders NVIDIA and AMD joined as strategic partners.

Founded in 2015, Ayar Labs develops silicon photonics solutions that replace traditional copper connections inside servers with optical fiber links. By transmitting data as light rather than electrical signals, the company addresses copper’s physical and energy limitations—unlocking significantly higher bandwidth while reducing power consumption.

Its co-packaged optics (CPO) technology delivers four to twenty times more throughput per watt compared to copper interconnects, enabling thousands of GPUs to function as a unified, scalable AI system.

CEO Mark Wade stated that the funding targets one of AI’s most critical bottlenecks: high-speed data movement between processors. Optical interconnects, he noted, provide greater bandwidth density and energy efficiency, supporting the next generation of hyperscale AI workloads.

The new capital will support mass production, advanced testing capabilities, global expansion, and accelerated deployment of its TeraPHY™ optical engines, including the launch of a new office in Hsinchu, Taiwan, to deepen ecosystem partnerships across semiconductor manufacturing and design.

The funding reflects growing industry confidence in production-ready co-packaged optics solutions, particularly as AI demand shifts from large-scale model training toward inference-driven, real-world applications.