NVIDIA Invests $500M in Ayar Labs as Silicon Photonics Booms

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May 25, 2026

DouglasAdams

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Silicon photonics innovator Ayar Labs has secured $500 million in Series E funding to scale production of its co-packaged optics (CPO) solutions. The round was led by Neuberger Berman, with strategic investments from NVIDIA and MediaTek. This move follows NVIDIA's recent $4 billion investment in photonics leaders Coherent and Lumentum, underscoring its focused push into optical interconnect technology.

Chip

The Core Challenge: Overcoming Copper's Physical Limits

As AI models grow exponentially, traditional copper wiring has become a major bottleneck for scaling compute power. At data rates above 800Gbps, copper cables are limited to mere meters in reach, while also struggling with high power draw and signal integrity issues.

Ayar Labs addresses this with its flagship TeraPHY chip, offering a breakthrough solution:

Massive Bandwidth: The latest reference design packs eight TeraPHY chips, delivering up to 200Tbps of aggregate bandwidth per package—roughly seven times the 28.8Tbps of NVIDIA's Rubin GPU.

Efficiency and Reach: Unlike conventional pluggable optics, CPO technology integrates the optical engine directly into the GPU package. This slashes power consumption and latency, while enabling connections beyond a single rack.

Unmatched Scalability: The architecture can interconnect up to 10,000 GPUs across an extended domain, maintaining a manageable rack power density of approximately 100kW.

Ayar Labs, founded in 2015, has sustained deep technical partnerships with Intel and DARPA. The company is now working with GlobalWafers (GUC) and Alchip on reference designs to transition its technology from prototype to high-volume manufacturing.

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