❯ Optical interconnect company CScale exits stealth with a $145 million Series C, with Nvidia and Intel Capital investing

Lasers fail, compute should notCScale was founded in Palo Alto in 2023 and develops optical interconnect for AI data centers, using light to link thousands of accelerators into a single system. According to The Next Web, its pitch is to contain optical failures so that one failed laser does not interrupt the whole job. CEO Martin Lund puts it this way: “Lasers will fail. Compute shouldn’t.”

Two veteransFounder and CTO Sanjai Kohli co-founded the GPS chip company SiRF. CEO Lund previously led Cisco’s Common Hardware Group. The company has about 85 employees and has been backed by Sutter Hill Ventures since its inception.

First strategic investorsOn September 30, CScale came out of stealth and announced a $145 million Series C led by Atreides Management and co-led by Valor Equity Partners and Premji Invest, with Sutter Hill and Maverick Silicon participating. Nvidia and Intel Capital joined as its first strategic investors. Total funding is $188 million. The company disclosed neither customers nor a product timeline.

A crowded fieldThe same area has seen several large rounds in recent months: Lumilens raised $700 million in August, Celero closed a $275 million Series C in September, and Eliyan closed a $145 million Series C in July. How much any of them sells depends on whose design system makers such as Nvidia adopt, and Nvidia investing in CScale is not the same as adopting its product.

▪ SIGNALChip giants investing in several interconnect startups at once are buying options, and for a startup, winning an investment and winning an order are different things.