Ayar Labs raises $500M at $3.75B valuation as investors chase AI semiconductor plays beyond Nvidia

Ayar Labs just closed a $500 million Series E funding round at a $3.75 billion valuation. The round, led by Neuberger Berman, brings the San Jose-based company’s total funding to roughly $870 million.

Who’s writing the checks

ARK Invest, Insight Partners, Qatar Investment Authority, and Sequoia Global Equities all participated in the round. AMD, Nvidia, MediaTek, and Alchip Technologies also backed the round.

Nvidia’s involvement is particularly notable. The chipmaker chose to invest in Ayar Labs while also bringing the company into its NVLink Fusion ecosystem in June 2026.

Why copper is running out of road

Traditional copper interconnects are hitting physical limits. As AI models grow larger and training runs demand more data movement, copper links struggle with bandwidth, power consumption, and latency.

Ayar Labs replaces those copper links with optical ones. Their core products, TeraPHY optical engines and SuperNova light sources, integrate directly with semiconductor chips to move data using light instead of electrical signals.

Founded in 2015, the company spent years in the research phase before the AI boom turned its technology from a nice-to-have into a potential necessity. The previous fundraise, a $155 million Series D closed in December 2024, already had AMD, Nvidia, and Intel Capital on board.

The company’s recognition on Fast Company’s 2026 list of the World’s Most Innovative Companies, where it ranked in the top five of the Computing category, coincides with Ayar Labs entering volume production of its optical technologies.

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