Nvidia, AMD, and Intel all invest in light-based communication networks powering next-gen chips — Ayar Labs gets $155 million in funding

Ayar Labs, a developer of optical interconnection technologies for chip-to-chip and machine-to-machine connectivity, has received $155 million in Series D funding from venture capitalists, AMD Ventures, Intel Capital, and Nvidia. The participation of industry giants highlights the importance of optical interconnects for next-generation AI and HPC machines. Ayar Labs plans to start commercializing its technology by mid-2026.

Ayar Labs has managed to shrink fiber-optic communication technology to fit within chip packages, which makes it critically important for companies like AMD, Intel, and Nvidia, which strive to replace electrical interconnects with optical ones, reports Bloomberg. The company has two products in development: the TeraPHY Optical I/O chiplet and the SuperNova multi-port, multi-wavelength light source.

The TeraPHY Optical I/O chiplet is so tiny that it integrates seamlessly into advanced chip packaging and enables up to 4 Tbps of bidirectional bandwidth with a 5 ns latency per chiplet plus time-of-light (TOF) latency that is designed for package-to-package connections. The chiplet consumes about 10W, or 5 pJ per byte, which is a relatively low power consumption, given how fast TeraPHY is.

The SuperNova remote light source is another key component of Ayar Labs’ optical I/O solution. The device delivers up to 16 wavelengths of light to support 16 ports and can supply light for 256 data channels or 16 Tbps bidirectional. According to Ayar Labs, the device is designed to work seamlessly with TeraPHY and to provide 5–10 times higher bandwidth, 10 times lower latency, and 4–8 times greater power efficiency compared to traditional interconnects like pluggable optics and electrical SerDes.

“The leading GPU providers — AMD and Nvidia — and semiconductor foundries — GlobalFoundries, Intel Foundry, and TSMC — combined with the backing of Advent, Light Street, and our other investors underscore the potential of our optical I/O technology to redefine the future of AI infrastructure,” said Mark Wade, CEO and co-founder of Ayar Labs. “We are incredibly fortunate to have the backing of Light Street’s deep expertise in technology-specific investments, as well as Advent’s robust private and growth equity background in this funding round.”

GlobalFoundries currently manufactures Ayar’s chips, but the company is also working with Intel to integrate its photonic technology into Intel’s manufacturing processes and is in discussions with TSMC. Customers are already testing Ayar’s chips, and TeraPHY and SuperNova are expected to be ready for high-volume production by mid-2026.

Advent Global Opportunities and Light Street Capital led the Series D funding, which was participated in by AMD Ventures, Intel Capital, and Nvidia. New investors in Ayar include 3M Ventures and Autopilot. Existing backers of Ayar Labs, such as GlobalFoundries, Applied Ventures LLC, Lockheed Martin Ventures, and VentureTech Alliance, also contributed to Series D, bringing the company’s total funding to $370 million and raising its valuation to over $1 billion.