Lightmatter Secures $400M Funding, Revolutionizing AI Data Centers with Photonic Technology

Lightmatter raises $400M at $4.4B valuation for next-gen photonic data center networking - SiliconANGLE

Lightmatter Inc., a startup building photonic supercomputing products, today announced it has raised $400 million in a late-stage round, raising the company's valuation to $4.4 billion. The Series D round was led by T. Rowe Price Associates and joined by existing investors, including Fidelity Management & Research Co. and GV, the venture capital arm of Alphabet Inc. The new round brings the total raised by the company to $850 million to date. Lightmatter builds full-stack photonic technologies, including networking interconnect for how computer chips communicate and trade data. The company looks to provide higher bandwidth, lower latency connections between chips using optical fiber connections as data centers scale to tackle larger artificial intelligence and high-performance computing workloads. In less than a decade, graphics processing units have gotten more than 1,000 times faster in terms of operations per second. They have outstripped interconnect networking in terms of sheer bandwidth, Lightmatter Chief Executive Nick Harris told SiliconANGLE in an interview. Modern-day AI large language models have become so large and complex that they sometimes require thousands or tens of thousands of GPUs working in concert and they spend part of their lifetime idle waiting for data. "If you're one of these GPUs, your life is like: OK, I'm waiting for data from memory, crunch, crunch, crunch, OK, waiting for data from another GPU, crunch, crunch, crunch, and just sitting there," said Harris. "Only 30% of the time you're doing calculations. So, you've got this Ferrari engine, it's in Manhattan, and there's stoplights everywhere." As frontier AI models expand the training clusters needed to handle them cannot keep up, Harris said. It's not the chips that are the bottleneck - it's their ability to communicate with one another. To solve this problem, Lightmatter developed Passage, a next-generation optical networking solution that interposes between data center chips with ultra-dense optical fibers. This can bring bandwidth up to 100 terabits per second, or around 100x current data center interconnect speeds. In a traditional data center, GPUs interconnect through a large number of networked switches that form a layered hierarchy to connect GPUs together, Harris explained. This generates a great deal of latency because for one GPU to reach another, it must go through several switches first. Much of that idle time GPUs spend is waiting for the data to flow through the network. "What we're able to do is flatten that hierarchy," said Harris. "So instead of six or seven layers of switches, you've got two, and each GPU can connect to thousands of GPUs." Harris also added that Passage saves power. To sustain one link between two layers of switches, he explained can require up to 300 watts, but with Lightmatter's solution, it's only about 50 watts, a sixfold power reduction. With this financing, Harris said Lightmatter will be preparing Passage for mass deployment in partner data centers and scaling up the company's team to build on the photonics technology stack. "We're innovating across the stack, with photonics," said Harris. "What we see going forward is that the future is all about interconnect. There's a limit to how big computer chips can be. It's wafer-scale, 300 millimeters squared in diameter, so 12 inches. When you get to that point, and I think it's 10 years away, the only thing that matters is the links between the chips."

Photonic Startup Lightmatter Raises $400M Amid Data Center Frenzy; Hits $4.4B Valuation

Lightmatter, a startup that uses light to link chips together and to do calculations for the deep learning necessary for AI, locked up a $400 million Series D led by new investor T. Rowe Price at a $4.4 billion valuation. The new round nearly quadruples its previous valuation of $1.2 billion in December after a $155 million raise led by GV -- which along with Fidelity Management and Research Co. also participated in the new round. As Big Tech pours hundreds of billions of dollars into new AI data centers, Lightmatter is trying to solve the problems around energy consumption and scalability of those new centers. The company's tech uses silicon photonics that can speed up processes while also using less power. While the idea of using light in computing isn't new, creating the components has historically been challenging. The new Series D is Lightmatter's largest to date, but the Boston-based company is not new to big raises. In May 2023, the startup locked up a $154 million raise before extending that round in December. Founded in 2017, Lightmatter has raised $850 million, per the company. Co-founder and CEO Nick Harris told Reuters, "This is probably our last private funding round." Lightmatter's was not the only large raise by a photonic startup this week. Xscape Photonics -- a New York-based startup also using photonics technology to address the energy, performance and scalability challenges of AI data centers -- raised a $44 million Series A led by IAG Capital Partners and with investment from the likes of Cisco Investments and Nvidia.

Photonic startup Lightmatter raises $400 million amid AI datacenter boom, eyes IPO next

Oct 16 - Lightmatter, a Mountain View, California-headquartered startup building photonic tech in datacenter networking chips, said on Wednesday it has raised $400 million in a Series D funding round at a valuation of $4.4 billion. New investor T. Rowe Price led the funding round, with participation from existing backers including Fidelity and Alphabet's GV. The latest funding came less than a year since the last raise, bringing total funding since inception to $850 million as the company tries to capitalize on the datacenter boom and need for more efficient infrastructure in the artificial intelligence (AI) race set off by ChatGPT. Advertisement · Scroll to continue Lightmatter said its fresh capital will be used to manufacture and deploy its photonic chips in partner data centers, as well as expanding its 200-person team across the U.S. and Canada. The funding follows the appointment of former Nvidia executive Simona Jankowski as CFO, and could pave its way for a potential public offering. "This is probably our last private funding round," said co-founder and CEO Nick Harris. "We've booked very large deals. And that is the reason that this level of funding is possible. We see a future where most of the high performance computing and AI chips very soon are going to be based on Lightmatter tech." Advertisement · Scroll to continue The company, which develops methods for computer chips to communicate and perform calculations using silicon photonics, said it sees huge demand from cloud providers and AI companies, but declined to name its customers. While the concept of using light in computing isn't new and offers potential for faster, more energy-efficient processes, creating the necessary components has historically been challenging. Founded in 2017, Lightmatter says its proprietary technology enables photonics chips to move data, increasing AI cluster bandwidth and performance while reducing power consumption. Its first large clusters are expected to be running next year. Editing by Elaine Hardcastle Our Standards: The Thomson Reuters Trust Principles., opens new tab Krystal Hu Thomson Reuters Krystal reports on venture capital and startups for Reuters. She covers Silicon Valley and beyond through the lens of money and characters, with a focus on growth-stage startups, tech investments and AI. She has previously covered M&A for Reuters, breaking stories on Trump's SPAC and Elon Musk's Twitter financing. Previously, she reported on Amazon for Yahoo Finance, and her investigation of the company's retail practice was cited by lawmakers in Congress. Krystal started a career in journalism by writing about tech and politics in China. She has a master's degree from New York University, and enjoys a scoop of Matcha ice cream as much as getting a scoop at work.

Lightmatter's $400M round has AI hyperscalers hyped for photonic datacenters | TechCrunch

Photonic computing startup Lightmatter has raised $400 million to blow one of modern datacenters' bottlenecks wide open. The company's optical interconnect layer allows hundreds of GPUs to work synchronously, streamlining the costly and complex job of training and running AI models. The growth of AI and its correspondingly immense compute requirements have supercharged the datacenter industry, but it's not as simple as plugging in another thousand GPUs. As high performance computing experts have known for years, it doesn't matter how fast each node of your supercomputer is if those nodes are idle half the time waiting for data to come in. The interconnect layer or layers are really what turn racks of CPUs and GPUs into effectively one giant machine -- so it follows that the faster the interconnect, the faster the datacenter. And it is looking like Lightmatter builds the fastest interconnect layer by a long shot, by using the photonic chips it's been developing since 2018. "Hyperscalers know if they want a computer with a million nodes, they can't do it with Cisco switches. Once you leave the rack, you go from high density interconnect to basically a cup on a strong," Nick Harris, CEO and founder of the company, told TechCrunch. (You can see a short talk he gave summarizing this issue here.) The state of the art, he said, is NVLink and particularly the NVL72 platform, which puts 72 Nvidia Blackwell units wired together in a rack, capable of a maximum of 1.4 exaFLOPs at FP4 precision. But no rack is an island, and all that compute has to be squeezed out through 7 terabits of "scale up" networking. Sounds like a lot, and it is, but the inability to network these units faster to each other and to other racks is one of the main barriers to improving performance. "For a million GPUs, you need multiple layers of switches. and that adds a huge latency burden," said Harris. "You have to go from electrical to optical to electrical to optical... the amount of power you use and the amount of time you wait is huge. And it gets dramatically worse in bigger clusters." So what's Lightmatter bringing to the table? Fiber. Lots and lots of fiber, routed through a purely optical interface. With up to 1.6 terabits per fiber (using multiple colors), and up to 256 fibers per chip... well, let's just say that 72 GPUs at 7 terabits starts to sound positively quaint. "Photonics is coming way faster than people thought -- people have been struggling to get it working for years, but we're there," said Harris. "After seven years of absolutely murderous grind," he added. The photonic interconnect currently available from Lightmatter does 30 terabits, while the on-rack optical wiring is capable of letting 1,024 GPUs work synchronously in their own specially designed racks. In case you're wondering, the two numbers don't increase by similar factors because a lot of what would need to be networked to another rack can be done on-rack in a thousand-GPU cluster. (And anyway, 100 terabit is on its way.) The market for this is huge, Harris pointed out, with every major datacenter company from Microsoft to Amazon to newer entrants like xAI and OpenAI showing an endless appetite for compute. "They're linking together buildings! I wonder how long they can keep it up," he said. Many of these hyperscalers are already customers, though Harris wouldn't name any. "Think of Lightmatter a little like a foundry, like TSMC," he said. "We don't pick favorites or attach our name to other people's brands. We provide a roadmap and a platform for them -- just helping grow the pie." But, he added coyly, "you don't quadruple your valuation without leveraging this tech," perhaps an allusion to OpenAI's recent funding round valuing the company at $157 billion, but the remark could just as easily be about his own company. This $400 million D round values it at $4.4 billion, a similar multiple of its mid-2023 valuation that "makes us by far the largest photonics company. So that's cool!" said Harris. The round was led by T. Rowe Price Associates, with participation from existing investors Fidelity Management and Research Company and GV. What's next? In addition to interconnect, the company is developing new substrates for chips so that they can perform even more intimate, if you will, networking tasks using light. Harris speculated that, apart from interconnect, power per chip is going to be the big differentiator going forward. "In ten years you'll have wafer-scale chips from everybody -- there's just no other way to improve the performance per chip," he said. Cerebras is of course already working on this, though whether they are able to capture the true value of that advance at this stage of the technology is an open question. But for Harris, seeing the chip industry coming up against a wall, he plans to be ready and waiting with the next step. "Ten years from now, interconnect is Moore's Law," he said.