Nvidia is helping fund the replacement of its own copper
Ayar Labs has lifted its 2026 primary funding to $650 million to build optical engines that replace the copper linking AI accelerators. Nvidia, AMD, Intel and Wiwynn are all on the cap table, and Wade's own deadline is volume qualification by the end of 2027.
Vincent Jiang · 2 min read
$650 million in one year, at two valuations
Ayar Labs added $150 million on 10 September, extending the $500 million Series E it closed in March; that round valued the startup at $3.75 billion and took total funding to $870 million 1 2. A $225 million secondary led by Antero Peak Group at Artisan Partners, with Sequoia Global Equities, ARK Invest and Greycroft, let early shareholders out above $5 billion 3.
The strategic list is the tell. Wiwynn, the Taiwanese rack builder, invested earlier this year, joining Alchip, AMD, Intel, MediaTek and Nvidia 1 4. "Copper interconnect is becoming the limiting factor for AI scale-up," chief executive Mark Wade said 1.
Light where the copper used to be
Ayar's TeraPHY optical engine puts photonics inside the package, beside the accelerator, so data leaves the chip as light. The rack it designed with Wiwynn scales to 1,024 accelerators, each carrying more than 100 terabits per second of optical connectivity 5. Wade says AI revenue growth is now capped by scale-up interconnect, that 2 and 4 terabit-per-second chiplets sit in customer labs with an 8 terabit part coming, and that fiber-to-chip coupling is the yield problem 6. One projection puts US silicon photonics at $1.00 billion in 2025, headed to $10.76 billion by 2035 7.
Nvidia is on both sides of the trade
Nvidia co-led Ayar's $155 million Series D with Intel and AMD, then joined the Series E 7 8. In June, Ayar entered the NVLink Fusion ecosystem, making its optics compatible with Nvidia's rack; Wade frames that attach as the real market 6 8 9. The open alternative, the UALink consortium, passed 115 members with optics on its roadmap, and many of the same vendors back both horses 10.
Nvidia hedges the other way too: it has bought into Lumentum, Corning and Coherent, and its own co-packaged optics switches are in full production 9. Whether the backplane is copper or light, the toll booth stays where Nvidia put it.
Qualify by 2027, or miss the ramp
Wade's clock is public: customers ramp their products in 2028 to 2029, so Ayar must be qualified for volume production by the end of 2027 3. The rest of this month's photonics wave raised far less 11.
Ayar's $150M top-up out-raises the other three photonics rounds combined
Data
| Value | |
|---|---|
| Ayar Labs add-on | $150M |
| Polaris Electro-Optics | $50M |
| Quintessent | $40M |
| PicoJool | $27.5M |
The interview ran under the banner of a road to an IPO 6. Copper is dying on schedule; the open question is whether its replacement gets built inside Nvidia's rack or against it.
How this brief was made
01Gathered & sourced329 channels · 2,305 articles▾
Agents swept 329 channels and ingested 2,305 articles, then de-duplicated and ranked them for signal.
02Verified & cross-validated11 claims · 38 data feeds▾
Every one of 11 load-bearing claims was checked against primary sources, with 38 live data feeds reconciling the figures and charts.
- 1Business Wire via Yahoo Finance, "Ayar Labs Expands 2026 Funding to $650 Million to Scale Manufacturing-Ready CPO for AI Scale-Up Beyond the Rack," 10 September 2026
- 2Pulse 2, "Ayar Labs: $500 Million Series E Raised At $3.75 Billion Valuation For Optics Solutions For AI Scale-Up," 3 March 2026
- 3Reuters (Stephen Nellis), "Ayar Labs, backed by chip giants, extends funding round by $150 million," 10 September 2026
- 4Semiconductor Today, "Ayar Labs expands 2026 funding to $650m to scale manufacturing-ready CPO for AI scale-up beyond rack," 10 September 2026
- 5Business Wire, "Ayar Labs and Wiwynn Partner to Bring Co-Packaged Optics to Rack-Scale AI Systems," 10 March 2026
- 6TMTB Podcast Intel (Ethmos), "Ayar Labs CEO Mark Wade on the Interconnect Bottleneck, Co-Packaged Optics and the Road to an IPO," 22 September 2026
- 7Quantum Zeitgeist, "Ayar Labs says US silicon photonics market will grow ten-fold by 2035," 25 September 2026
- 8Business Wire, "Ayar Labs Joins NVIDIA NVLink Fusion Ecosystem to Bring Co-Packaged Optics to Rack-Scale AI Infrastructure," 2 June 2026
- 9SDxCentral (Ben Wodecki), "Ayar Labs joins NVLink Fusion, bringing co-packaged optics to Nvidia's AI infrastructure," 3 June 2026
- 1036Kr (English edition), "Ex-Intel veterans team up to take on NVLink," 26 September 2026
- 11Semiecosystem (Mark Lapedus, Substack), "Ayar, PicoJool, Polaris, Quintessent Receive VC Funding," 25 September 2026
03Reviewed & edited1 human editor▾
One editor read the draft against the evidence, tuned the framing, and signed off before it shipped.
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