Key Highlights
- Ayar Labs secured $150 million in funding, bringing total capital raised in 2026 to $650 million, to support manufacturing scale-up and product development.
- The company’s co-packaged optics, including the TeraPHY™ Optical Engine, aim to overcome copper’s limitations in distance, power, and heat for AI and GPU clusters.
- Strategic investors like Wiwynn, AMD, Intel, MediaTek, and NVIDIA are backing Ayar Labs to advance optical connectivity solutions for data centers.
- A new Bengaluru Design Center will expand Ayar Labs’ global engineering capacity, supporting faster development and customer collaboration.
- The partnership with Wiwynn integrates optical engines into rack-level architectures, enabling more efficient, scalable AI data center deployments.
Ayar Labs, a developer of co-packaged optics (CPO) solutions for AI scale-up in data centers, has secured an additional $150 million in funding, bringing its total primary capital raised in 2026 to $650 million.
The company also noted a strategic investment earlier this year. Wiwynn, a cloud IT and infrastructure provider for data centers, joins a growing group of strategic backers, including Alchip, AMD, Intel, MediaTek, and NVIDIA.
This new capital will support Ayar Labs’ continued transition to high-volume manufacturing, including investments in product development, validation, scaling the manufacturing ecosystem, and opening a new Bengaluru Design Center. A key goal for Ayar Labs is to develop deep integration across the semiconductor manufacturing and engineering ecosystem to deliver the highest-performing and manufacturing-ready CPO solution for AI scale-up.
"Copper interconnect is becoming the limiting factor for AI scale-up," said Mark Wade, CEO and co-founder of Ayar Labs. "This funding allows us to move faster on manufacturing-ready co-packaged optics at scale. We're deepening our work across the foundry and packaging ecosystem and growing our engineering capacity to support customer programs worldwide."
Overcoming copper’s limitations
One of Ayar’s goals is to create a path to help scale AI systems by replacing copper with optical connectivity to accommodate the growth of AI models and GPU clusters.
As AI models and GPU clusters grow, copper interconnects are becoming a critical bottleneck because of three main issues: distance limitations, power, and temperature.
First, copper cables can only work over short distances before signal degradation occurs. Copper cables are power-hungry. As clusters grow to thousands of GPUs, copper I/O power consumption rises to unsustainable levels. Finally, traditional copper wiring causes severe overheating when linking high-performance processors.
Ayar Labs’ TeraPHY™ replaces copper with optical connectivity that delivers the bandwidth, performance, power efficiency, and low latency needed to connect large GPU clusters across racks and data centers.
By leveraging co-packaged optics (CPO), Ayar places optical engines like the TeraPHY™ Optical Engine directly into the ASIC socket alongside the processor.
Ayar is also working with partners like Wiwynn, a cloud IT infrastructure provider for data centers, to deliver optically connected, rack-scale AI systems that support hyperscale AI workloads. The joint solution integrates Ayar Labs’ AI scale-up CPO technology, including TeraPHY™ optical engines powered by the SuperNova™ remote light source, into Wiwynn’s rack-level architecture for next-generation data centers.
“Co-packaged optics is a foundational technology for the next generation of AI and cloud data centers,” said William Lin, President and CEO of Wiwynn. “Through our collaboration and investment with Ayar Labs, we see a clear path to new architectures that reduce the power and complexity limits of copper interconnects, powering rack-scale deployment for the next wave of hyperscale AI data centers."
Enhancing manufacturing capabilities
With the new funding, it will also advance Ayar Labs’ geographic growth strategy.
Ayar Labs is expanding its worldwide engineering presence with a new Bengaluru Design Center. This engineering hub will complement existing teams in the United States and Hsinchu, Taiwan.
Sankara Venkateswaran, Ayar Labs VP of silicon engineering, who joined Ayar earlier this year, is overseeing the new office, with Arun Balachandar, senior director of engineering, serving as site lead. The new India Design Center team will build end-to-end engineering capabilities across silicon product development.
“Our new Bengaluru Design Center supports our transition from technology development to commercialization and production,” said Venkateswaran. “As customer demand and the complexity of our product roadmap increase, expanding our global engineering capacity will help us execute faster, support multiple development programs, and collaborate more closely with partners and customers across the region.”
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About the Author
Sean BuckleySean Buckley
Sean is the Editor-in-Chief of Lightwave. He establishes and executes Lightwave's editorial strategy across its website, email newsletters, events, and other information products. Before coming to Lightwave in July 2023, he served as editor of Broadband Communities. Earlier, he served as senior editor of FierceTelecom and the editor of the former Telecommunications Magazine. He got his start in the optical industry in 1998 when he became the editor of enterprise and optical networks at Information Gatekeepers. He has a BA in English from the University of Massachusetts, Boston, and lives in Dracut, Mass, with his wife, two sons, and his cat, Dove.
