Ayar Labs raises $500 million to scale AI co-packaged optics

News and Business

Co-packaged optics (CPO) solutions provider Ayar has announced the closing of 500 million in Series E funding led by Neuberger Berman.

The company will use the funds to scale high-volume production and test capacity to accelerate the deployment of its CPO solution.

This brings the company’s total funding to $870 million and raises the company’s valuation to $3.75 billion.

“AI infrastructure is hitting a power wall driven by interconnect inefficiency. As bandwidth demands explode, copper becomes the bottleneck — consuming too much power and limiting AI throughput per watt and per dollar,” said Mark Wade, CEO and co-founder of Ayar Labs. “Co-packaged optics overcomes these barriers, enabling thousands of GPUs to operate as a unified system. This funding fuels our ability to meet the demands of hyperscale AI.”

The round aligns premier capital investors with industry leaders across the AI and semiconductor ecosystem, reinforcing the market’s support for Ayar Labs’ technology leadership and production-ready CPO solution for AI scale-up.

New investors include Alchip Technologies, ARK Invest, Insight Partners, MediaTek, Qatar Investment Authority (QIA), Sequoia Global Equities, and 1789 Capital.

They join existing financial institutions such as Advent Global Opportunities, Boardman Bay Capital Management, IAG Capital Partners, Light Street Capital, and Playground Global, and existing strategic investors, AMD Ventures, and NVIDIA.

“Today’s AI infrastructure buildout is one of the largest capital deployment opportunities of our generation, and data centre interconnect has quickly emerged as the most critical bottleneck,” said Gabe Cahill, Managing Director, Neuberger Berman. “Ayar Labs’ execution against key customer milestones is driving strong market conviction in its technology leadership. We believe that both ongoing and new strategic investments from industry leaders in this round reinforce this momentum. With a production-ready scale-up co-packaged optics solution and deep ecosystem integration, we are excited to lead this round and help accelerate the paradigm shift taking place in AI infrastructure.”

Neuberger Berman will take a board observer role, bringing deep experience in scaling category-defining technology companies. In addition, the investment participation of MediaTek and Alchip Technologies further strengthens Ayar Labs’ alignment with key custom ASIC design ecosystem partners.