Startup Ayar Labs is attracting attention from key players in the AI ​​industry. The company develops optical connections for AI chips to transmit data via light beams.

Ayar Labs, a California startup, has already raised a total of $370 million in investments. These investments increase the value of the start-up to over a billion dollars. Investors include big names from the AI ​​industry, including Nvidia, AMD and Intel. Ayer wants to address one of the biggest bottlenecks in AI training and inference.

While processing AI workloads, data must be moved between chips. The components are connected to each other using copper wires. The data is converted into electrical signals. At high data rates, forward error correction occurs, which increases latency and reduces performance.

Seen the light

Ayer believes he has found a solution to this. The company developed TeraPHY, an optical connection that converts data into light signals instead of electrical signals. The technology enables more efficient communication between chips.

The modules offer 1,000 times higher bandwidth density while requiring up to ten times less power than electrical connections. The result is that each module can transfer up to 25.6 terabits of data per second between a server’s chips, the company says. The light signals are generated by another device called SuperNova.

A jab in the back

The capital injection will enable Ayar to increase TeraPHY production, the company said in the press release. Although there is no guarantee that Nvidia, AMD and Intel will actually implement the technology in their chips, as investors they can monitor developments more closely.

Parties like Nvidia regularly open their pockets to stimulate the development of potentially interesting technologies. Dutch startup Nebius recently received a million-dollar check from Nvidia. They do this not only out of compassion, but also to be first in line when the technology becomes widely available.