Silicon Valley–based optical-interconnect solutions provider Ayar Labs announced in early March that it had raised US$500 million in a series E funding round, bringing the company’s total funding to about US$870 million and pushing its valuation to US$3.75 billion.

The company says that the new influx of capital will help it scale high-volume production and test capacity for its co-packaged optics (CPO) technology, expand global operations—including its growing presence in Taiwan’s semiconductor hub of Hsinchu—and accelerate the deployment of its CPO solution in AI data centers.

Overcoming bottlenecks

Ayar Labs was founded in 2015 by CEO Mark Wade and CTO Vladimir Stojanovic. The company aims to solve AI’s “data bottleneck” using silicon photonic “chiplets” that push the conversion between the electrical and optical domains as close to the GPU as possible, allowing connectivity across distributed computing resources to stay encoded as fast, energy-efficient light in optical fiber. To this end, the firm combines its TeraPHY optical input/output chiplets, which are manufactured by GlobalFoundries, with its SuperNova off-chip, multi-wavelength light sources to enable faster data transfer while cutting costs, latency and power consumption.

“AI infrastructure is hitting a power wall driven by interconnect inefficiency,” said Wade in an announcement of the new funding. “As bandwidth demands explode, copper becomes the bottleneck—consuming too much power and limiting AI throughput per watt and per dollar. 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.”

Investment in AI infrastructure

The series E round was led by Neuberger Berman, along with new investors Alchip Technologies, ARK Invest, Insight Partners, MediaTek, Qatar Investment Authority (QIA), Sequoia Global Equities and 1789 Capital. The new funding follows a series D round announced in December 2025, which raised US$155 million from leading chip manufacturers AMD Ventures, Intel Capital and Nvidia.

According to Ayar Labs, Neuberger Berman will take a board observer role, bringing its 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."

 “Ayar Labs’ execution against key customer milestones is driving strong market conviction in its technology leadership,” said Gabe Cahill, Managing Director at Neuberger Berman. “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.”