ayar Secures $35M to Revolutionize CPU Interconnects

The pursuit of more effective chip technology for quicker, less energy-consuming computing is intensifying, and a pioneering startup utilizing in-package optical interconnect (optical I/O) technology has just announced a new funding round. This investment, coming from a diverse group of strategic investors, highlights the growing recognition of their innovative approach.

Ayar Labs, a company specializing in chip solutions founded on optical networking principles, has secured $35 million in a Series B funding round. This round was jointly led by Downing Ventures and BlueSky Capital, and included contributions from Applied Ventures (the venture capital division of Applied Materials), Castor Ventures, and SGInnovate (the Singaporean government’s deep tech investment fund). Existing investors, such as Founders Fund, GLOBALFOUNDRIES, Intel Capital, Lockheed Martin Ventures, and Playground Global, also participated.

Charles Wuischpard, CEO of Ayar Labs, explained that the new capital will be allocated to ongoing product development and expanded commercialization efforts. “Our technology’s primary focus is on next-generation computing, specifically in scenarios involving substantial data transfer,” he stated.

This encompasses applications in the aerospace and defense sectors, artificial intelligence, high-performance computing, telecommunications, cloud infrastructure, and lidar systems for autonomous vehicles and other self-governing technologies. Currently, Wuischpard noted that the majority of Ayar’s projects are centered around AI and HPC, and the company is a significant collaborator with Intel on AI computing initiatives for Darpa.

Ayar’s dedication to optical technology – particularly the use of silicon photonics and processing to create an optical communication device integrated directly into a CPU – is becoming increasingly important for chip manufacturers. Recently, Marvell announced its acquisition of Inphi, an optical networking specialist, in a deal valued at $10 billion.

According to Wuischpard, Ayar’s key achievement lies in miniaturizing and scaling the technology to function within a computer’s central processing unit (CPU). This impacts and regulates memory, the control unit, and processing/logic, ultimately accelerating computing performance for the most demanding tasks.

(The company was initially established by Mark Wade, Chen Sun, Vladimir Stojanovic, and Alexandra Wright-Gladstein, building upon research conducted at MIT. They then brought in Wuischpard, an engineer and experienced executive from Intel, to guide the development of a commercially viable business.)

“Optical technology has a long history,” he observed, starting with underwater cabling, then expanding to connections between data centers, and subsequently within data centers themselves. “We position ourselves as the ‘last mile’ or ‘first mile,’ integrating optical technology directly into the CPU.”

The company has developed a novel type of modulator to convert electrons into photons, which Wuischpard refers to as a “microing modulator.” “While numerous research papers have explored this concept, manufacturing and consistent operation across varying temperatures have proven challenging. Our patents address these issues, enabling the creation of a single chiplet,” he explained. The technology’s bandwidth capacity, 2 terabits/second, “would typically require an entire server, yet we achieve this within a 5x9 millimeter space.”

Wuischpard added that the potential in this field is attracting other companies to pursue similar technologies. “There are larger corporations and a few smaller firms involved, but they are generally a couple of years behind us in terms of commercial readiness,” he said. “Successfully building one functional unit is different from producing a million.” The involvement of GLOBALFOUNDRIES as an investor – and as a manufacturer of Ayar’s hardware – is crucial in this regard.

I suggested that the company could be an attractive acquisition target, given the competitive race to secure ownership of technologies that provide a competitive advantage, and the ongoing consolidation within the chip industry. (Intel’s acquisition of Habana Labs further demonstrates its interest in optical technology.)

Wuischpard responded with a touch of irony, noting that the COVID-19 pandemic has inadvertently been “helpful” by slowing down acquisition activity, giving the startup more time and reducing the pressure to sell.

“Ayar Labs embodies the future of interconnects, with potential applications in every electronic device worldwide,” stated Warren Rogers, partner and head of Ventures at Downing Ventures, in a press release. “We are confident that their optical I/O technology will enable the computing industry to overcome the limitations of Moore’s Law and redefine the boundaries of computational power.”

“We have been investors in Ayar Labs from the outset and have actively sought opportunities to increase our stake in the company,” added Madison Hamman, managing director of BlueSky Capital. “We are incredibly enthusiastic about Ayar Labs and believe their patented technology, combined with their strategic plan, positions them as a fundamental component of future computing systems.”