Nvidia-backed Ayar Labs raises $500 million at $3.75 billion valuation

March 3 (Reuters) - Nvidia-backed ‌Ayar Labs, ​which ​develops chips that transmit data using light, said on Tuesday it has raised $500 million in ‌a series E round at a valuation of $3.75 ⁠billion.

The latest round, which brings the company's total funding to $870 ‌million, was led by ‌investment firm Neuberger Berman and involved new investors including ARK Invest, Qatar Investment Authority and 1789 Capital. ​Chipmaker Advanced Micro Devices is among Ayar's existing backers and invested in the latest funding round.

Investor ⁠appetite in the AI ecosystem has remained strong as venture and private-equity ​firms bet on the technology to upend traditional workflows, driving steady funding into companies ​building the infrastructure.

Ayar's technology uses ‌light instead of the traditionally used electrical signals, aiming to speed transmission by linking ⁠AI computing chips with memory chips, an increasingly valuable prospect as hyperscalers and governments spend hundreds of billions of ⁠dollars for achieving AI infrastructure supremacy.

The company competes with firms ​such as Celestial AI, which raised $250  million last March, as well as Lumentum and Coherent, which received $2  billion each in investments from Nvidia ‌on Monday.

Ayar plans to use the new funds to scale production and test ‌capacity, expand global operations, including at its new Hsinchu, ⁠Taiwan-based office and accelerate ‌the deployment of ​its co-packaged optics solution.

(Reporting by Pragyan Kalita in Bengaluru; Editing by Shailesh Kuber and Nick ‌Zieminski)

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