Tech Startup Raises $700 Million --- Lumilens makes optical gear to speed data transfer between AI servers

“Lumilens, a two-year-old startup building optical-interconnection technology for data centers, has raised more than $700 million at a $5.5 billion valuation, as firms search for better ways to connect growing numbers of artificial-intelligence chips.

 

The financing was co-led by Atreides Management, Bain Capital Ventures, Meritech, Seligman Ventures and Spark Capital, Lumilens said. The San Jose, Calif.-based company has raised more than $900 million since its founding and recently began shipping equipment into the data centers of a large hyperscale cloud provider it declined to name. The agreement is valued at billions of dollars over the next several years, the company said.

 

As companies cram more-powerful graphics chips into data centers, moving information quickly between those processors is becoming a bigger challenge. Lumilens is among a group of heavily funded startups trying to solve that problem with light.

 

The idea is to use optical connections -- which transmit information using light -- instead of electrical signals traveling over wires. Graphics processing units today are typically connected with copper wiring, which is cheap and reliable but becomes less effective when handling larger amounts of data over longer distances.

 

Lightmatter, founded in 2017, has raised $850 million and was last valued at $4.4 billion in 2024. Celestial AI, founded in 2020, was pursuing a similar approach before Marvell acquired it in February for $3.25 billion.

 

The prevailing challenge in the industry is cost. Optical equipment can be several times as expensive as copper, according to Lumilens Chief Executive Ankur Singla, making it difficult to justify unless the performance gains are significant.

 

"Copper is way cheaper today and will be way cheaper than optics," Singla said in an interview. His goal, he said, is to close that gap.

 

That has pushed Lumilens to focus as much on manufacturing its products as on designing the chips inside them. Singla said he is also committed to manufacturing outside of China. That stance took on greater significance this week, after Reuters reported that the Trump administration is planning to ban imports of certain data-center components from China, including optical gear.

 

Optical technology has long been expected to replace copper in more parts of the data center, but the technology's high costs have slowed that shift. "Optics has always been there, but never used," said Umesh Padval, managing partner at Seligman Ventures, an investor in Lumilens. The AI boom could finally change that, he said.

 

Lumilens is working on two types of optical products. One connects separate server racks across a data center, known as "scale out." The other is designed to connect chips within a single rack.

 

The company's first product, an optical transceiver, converts electrical signals into light so data can travel over fiber-optic cables. It is already shipping the small device to the company's unnamed hyperscaler, which is using the technology alongside its own AI chips.

 

1. Tech Startup Raises $700 Million --- Lumilens makes optical gear to speed data transfer between AI servers. Gardizy, Anissa.  Wall Street Journal, Eastern edition; New York, N.Y.. 07 Aug 2026: B4.