Silicon Valley-based startup Celestial AI has raised an additional $250 million in venture capital, bringing its total funding to $515 million. The company aims to accelerate AI computing by leveraging photonics—a technology that uses light instead of electrical signals—to enhance the speed of data transfer between AI processing and memory chips.
Memory bandwidth, which determines the efficiency of AI systems, is a crucial factor in chip performance and a key consideration in U.S. government export controls aimed at limiting China’s AI capabilities. Currently, Nvidia dominates this space with its proprietary NVLink and NVSwitch technologies, prompting a surge in investments to develop alternative solutions. Celestial AI’s competitors, Lightmatter and Ayar Labs, have raised $850 million and $370 million, respectively, in similar efforts.
Celestial AI is backed by AMD Ventures, the investment arm of Nvidia’s competitor Advanced Micro Devices (AMD). The company is working on a “photonic fabric” that acts as a high-speed bridge between multiple chips. According to CEO Dave Lazovsky, the technology improves efficiency by reducing energy consumption and latency while saving valuable chip space.
“There are no good answers outside of Nvidia,” Lazovsky said in an interview at Celestial AI’s headquarters in Santa Clara, California. “What we’ve created with photonic fabric achieves similar functionality but with superior energy efficiency and lower latency.”
The funding round was led by Fidelity Management & Research and included BlackRock, Maverick Capital, Tiger Global Management, and former Cadence Design Systems CEO Lip-Bu Tan. Existing investors such as AMD Ventures, Koch Disruptive Technologies, Singapore’s state investor Temasek, and Porsche Automobil Holding also participated.
