Ayar Labs raises $500M to scale CPO
Ayar Labs is accelerating production of its co-packaged optics solutions for AI. Its TeraPHY optical engine enables more efficient, high-bandwidth data centre interconnects and highlights the growing role of photonics in next-generation AI infrastructure.
Ayar Labs, a leader in co-packaged optics (CPO) for AI-scale systems, has closed $500 million in Series E funding led by Neuberger Berman, with participation from investors including ARK Invest, Insight Partners, Qatar Investment Authority (QIA), Sequoia Global Equities, 1789 Capital, and strategic partners AMD, Alchip, MediaTek, and NVIDIA.
The round brings Ayar Labs’ total funding to $870 million and raises its valuation to $3.75 billion.
The company plans to use the funds to scale high-volume production and test capacity, expand global operations, including a new office in Hsinchu, Taiwan, and accelerate deployment of its CPO solutions for hyperscale AI.
“AI infrastructure is hitting a power wall driven by interconnect inefficiency,” said Mark Wade, CEO and co-founder of Ayar Labs. “As bandwidth demands explode, copper becomes the bottleneck. 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.”
Ayar Labs’ TeraPHY optical engine, central to its AI scale-up CPO solution, replaces bandwidth-limited copper interconnects with high-performance, energy-efficient optical connectivity.
Built on standard manufacturing and packaging flows, it integrates seamlessly with major accelerators and switches, allowing photonics technology to directly impact next-generation data centre performance and efficiency.
“This round aligns premier capital investors with industry leaders across the AI and semiconductor ecosystem, reinforcing confidence in Ayar Labs’ technology leadership,” said Gabe Cahill, Managing Director, Neuberger Berman. “With a production-ready CPO solution and deep ecosystem integration, we are excited to support the paradigm shift in AI infrastructure.”
For the PIC and semiconductor community, the funding signals strong market validation of co-packaged optics and highlights the growing role of advanced photonics packaging in AI-scale deployments.
