Ayar Labs adds $150M more, bringing 2026 funding to $650M for optical AI links
The co-packaged optics startup is racing to move from prototype to high-volume manufacturing as copper interconnects become the limiting factor for scaling GPU clusters.
Ayar Labs announced on September 10, 2026 that it has raised an additional $150 million, bringing its total primary capital raised in 2026 to $650 million. The extension adds to the $500 million Series E the co-packaged optics startup closed in March, which was led by Neuberger Berman with participation from Nvidia, AMD, MediaTek, and Wiwynn. Ayar Labs' TeraPHY technology replaces copper interconnects with fiber optics inside AI data centers, aiming to let GPU clusters scale past the power and thermal limits copper runs into.
Why copper is the bottleneck now
"Copper interconnect is becoming the limiting factor for AI scale-up," said co-founder and CEO Mark Wade. As GPU clusters grow to tens of thousands of chips, the distance and power budget copper wiring can support inside a rack becomes a hard ceiling on cluster size; Ayar Labs sells its optical chip as a drop-in component that hardware partners integrate into their own products rather than a rack-scale system of its own. Wiwynn CEO William Lin, whose company took a strategic stake in the March round, called co-packaged optics "a foundational technology for the next generation of AI and cloud data centers."
From prototype to production line
The new capital is earmarked specifically for the harder, less glamorous half of the CPO pitch: high-volume manufacturing. Ayar Labs says it will fund product validation and scale-up of its manufacturing ecosystem as it moves TeraPHY from limited deployments toward mass production for hyperscale customers. Chip-adjacent infrastructure startups routinely raise large rounds on the strength of a working demo; whether Ayar Labs can actually ship optical interconnects at the volume Nvidia- and AMD-scale GPU clusters require is the test this money is meant to fund passing.