Neye Systems, an AI chip startup spun from research at UC Berkeley, has raised fresh $58 million in funding to tackle one of the biggest challenges facing AI data centers: energy efficiency and flexibility.
The round is led by Capitalg, the growth fund for Alphabet, and includes support from Microsoft’s M12, Micron Technology, and Nvidia. The company is currently increasing its total of $72.5 million.
Founded in 2020 by Tae Jon Seok, Ming Wu and Xiaosheng Zhang, Neye is working on a new kind of chip that uses light rather than electricity to move data between AI processors. The company is building what is called the Optical Circuit Switch, a technology that allows data center operators to reconfigure machine connections based on the workload they are running.
This is a concept Google tested internally several years ago to build its own AI supercomputer. However, these chips were built in-house and never appeared in the open market. Nay wants to change that.
“Google is a pioneer. They led the way,” co-founder Min Wu told Reuters. “Other AI companies, other hyperscalar AI data center operators are looking to acquire some of the technology rather than developing it themselves.”
Neye Systems is confident as a next-generation optical switch company developing programmable photonic chips that integrate switching of Hiradix optical circuits into silicon platforms. The company said the technology is built to support AI/ML systems and other high-performance computing environments, providing solutions that are ready for the future as demand continues to grow.
According to Neye, the optical switch aims to tackle two major challenges in scaling AI infrastructure. It’s a limit on rising electricity costs and network expansion. The company says it is well funded early in the lifecycle and will become a key player in a multi-billion dollar market.
The tip promises two important things. It’s the ability to improve energy use and adapt on the spot. Both are large AI data center transactions, putting pressure on them to handle growing demand without blowing off their power budgets.
Neye has not announced the timing, but the team has already built a working prototype and hopes to share production samples next year.
James Luo, a general partner at Capitalg and investment leader, said the technology is not just limited to AI Boom. He believes it could be maintained in traditional data centers as well. “The beauty of it is as it applies to both models,” Luo said.
With celebrities like Microsoft, Micron, Nvidia and others on the table, Neye clearly bets that the transition to optics is not just about hype. This is the next move for businesses chasing more efficient infrastructure.
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