Silicon Valley startup CScale has raised $145 million in venture capital to develop optical connectivity technology for AI data-centre chips, with backing from industry giants Nvidia and Intel.
The company, which previously went by the name CSpeed, is being led by chief executive Martin Lund, who left his position overseeing chip and hardware systems at networking giant Cisco earlier this year, according to the Reuters report carried by the Economic Times.
Replacing copper with light
With this funding, CScale joins a crowded race in Silicon Valley to replace the copper cables that wire together the chips inside AI data-centre servers with optical cables. Copper connections are fast and reliable, but their limited reach has forced chip designers such as Nvidia and AMD to pack processors tightly inside servers — a design that demands elaborate liquid cooling systems to manage the heat.
Public companies and startups alike are now pouring billions of dollars into optical connections that use flashes of laser light instead of electrons to carry data. A persistent challenge is that the lasers are prone to frequent failures, which is why many firms in the field keep the laser separate from the chip so it can be replaced.
Lund declined to share specifics of CScale's technology in an interview, except to say that the company will integrate lasers directly onto chips in a way that does not interrupt data flow when the lasers fail.
"We're not using any exotic technologies," Lund said. "We're using proven technologies, integrating them together in a novel way, but preserving the same trusted fibre technology that has been out there and shipping in the industry for many, many years now."
Chips by 2028
The financing round was led by Atreides Management, Valor Equity Partners and Premji Invest. Existing investors Sutter Hill Ventures and Maverick Silicon also participated. With the new round, CScale has raised $188 million in total, and the company plans to ship its chips by 2028.
The raise underscores how intense the AI infrastructure buildout has become: as data centres grow to enormous scale, even modest improvements in how chips communicate can translate into major savings on power and cooling.
Sources: CScale raises $145 million for AI networking with backing from Nvidia and Intel
The company, which previously went by the name CSpeed, is being led by chief executive Martin Lund, who left his position overseeing chip and hardware systems at networking giant Cisco earlier this year, according to the Reuters report carried by the Economic Times.
Replacing copper with light
With this funding, CScale joins a crowded race in Silicon Valley to replace the copper cables that wire together the chips inside AI data-centre servers with optical cables. Copper connections are fast and reliable, but their limited reach has forced chip designers such as Nvidia and AMD to pack processors tightly inside servers — a design that demands elaborate liquid cooling systems to manage the heat.
Public companies and startups alike are now pouring billions of dollars into optical connections that use flashes of laser light instead of electrons to carry data. A persistent challenge is that the lasers are prone to frequent failures, which is why many firms in the field keep the laser separate from the chip so it can be replaced.
Lund declined to share specifics of CScale's technology in an interview, except to say that the company will integrate lasers directly onto chips in a way that does not interrupt data flow when the lasers fail.
"We're not using any exotic technologies," Lund said. "We're using proven technologies, integrating them together in a novel way, but preserving the same trusted fibre technology that has been out there and shipping in the industry for many, many years now."
Chips by 2028
The financing round was led by Atreides Management, Valor Equity Partners and Premji Invest. Existing investors Sutter Hill Ventures and Maverick Silicon also participated. With the new round, CScale has raised $188 million in total, and the company plans to ship its chips by 2028.
The raise underscores how intense the AI infrastructure buildout has become: as data centres grow to enormous scale, even modest improvements in how chips communicate can translate into major savings on power and cooling.
Sources: CScale raises $145 million for AI networking with backing from Nvidia and Intel
