By Tobias Mann
Publication Date: 2026-03-03 23:20:00
It’s a good time to be an AI chip startup, especially if you happen to specialize in silicon photonics.
On Tuesday, Nvidia-backed startup Ayar Labs raised $500 million to accelerate the mass production of its co-packaged optics (CPO) tech.
The cash infusion comes a day after Nvidia said it would inject $4 billion into photonic networking providers Coherent and Lumentum ($2 billion each) to scale up their manufacturing capacity in anticipation of demand.
Founded in 2015, Ayar Labs’ TeraPHY chiplets provide an alternative to copper for chip-to-chip communications that’s capable of supporting higher bandwidths over longer distances.
Above 800 Gbps, copper interconnects are limited to a couple of meters and often require retimers to keep error rates from getting out of hand. Because of this, higher-speed copper interconnects, like those found in Nvidia’s NVL72 systems, are usually constrained to the rack while pluggable optics are used for rack-to-rack communications.
Pluggable optics support much longer ranges, but that reach comes at the expense of higher power consumption and latency. This is the problem that silicon photonics providers, like Ayar, are…