Xscape Photonics Raises $44 Million Series A to Reimagine the AI Data Center

Funding led by IAG Capital Partners with investment from Cisco Investments, NVIDIA and others to accelerate the development of Xscape Photonics’ fully programmable, multi-color photonics technology to solve energy, performance and scalability challenges in AI data centers

News Highlights:

• $44M in funding led by IAG Capital Partners with investment from Altair, Cisco Investments, Fathom Fund, Kyra Ventures, LifeX Ventures, NVIDIA and OUP.
• Xscape Photonics to address cost, power consumption, bandwidth and scalability challenges associated with AI through its revolutionary approach to solving the “escape bandwidth” problem that is common in today’s AI data centers.
• Funding to ramp up production of the ChromX platform, a fully programmable, multi-color photonics platform for AI data center fabrics that maximizes “escape bandwidth” out of GPUs by 10X, reduces power consumption by 10X compared to incumbent solutions and improves overall inference performance for AI workloads.

Xscape Photonics, a startup using silicon photonics to support the next generation of AI data centers, today announced the successful close of a $44 million Series A funding round, increasing the total amount raised to $57 million. The financing was led by IAG Capital Partners with investment from Altair, Cisco Investments, Fathom Fund, Kyra Ventures, LifeX Ventures, NVIDIA and OUP. The funding will be used to accelerate the development of Xscape Photonics' ChromX platform, a scalable, multi-color, programmable photonics platform for AI data center fabrics.

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Xscape Photonics Co-founding team: Dr. Vivek Raghunathan, Prof. Alexander Gaete, Prof. Michal Lipson, Prof. Keren Bergman and Dr. Yoshi Okawachi (Photo: Business Wire)

“Historically, performance and scalability challenges have been addressed by building bigger data centers to train large language models. This approach is not sustainable and unlocks a myriad of additional issues around energy consumption and cost,” said Vivek Raghunathan, Co-Founder and CEO of Xscape Photonics. “At Xscape Photonics, we are on a mission to help our customers completely reimagine how they solve these challenges. This funding validates our mission and positions us for future growth to support next-generation AI data centers.”

According to a report by IDC, AI-driven workloads will account for over 20% of the energy consumption in large-scale data centers by 2025, especially as AI training becomes more common. With this growth occurring at such a rapid rate, AI data centers struggle to meet the energy efficiency, performance and scalability requirements needed to support the age of AI.

“The performance scaling challenges are centered on the fundamental problem of “escape bandwidth” that results in a key bottleneck for AI workloads,” said Keren Bergman, Co-Founder of Xscape Photonics.

"We see tremendous value in the technology that Xscape Photonics is developing to solve challenges customers are facing with AI data center energy usage and bandwidth performance,” said Alex Kash, Associate at IAG Capital Partners. “The future of the data center will be built around photonics and this capital will help to dramatically accelerate Xscape Photonics’ product development.”

Data centers have traditionally been constrained to transmit data streams over four colors on a single fiber. However, as bandwidth demand has grown, the need for a scalable laser and photonics platform becomes essential as vendors are unable to keep up with the surge in volume demand for lasers in these networks. Xscape Photonics’ multi-wavelength photonics platform can handle hundreds of colors on a single fiber, providing flexibility and efficiency for AI workloads. With its ChromX platform, Xscape Photonics is enabling hyperscale customers to reimagine the data center fabric by utilizing a scalable solution that can hit volume, cost and density targets.

“We are excited about accelerating commercialization of our unique multi-color laser photonics technology, for different custom use cases in the AI and hyperscaler markets,” said Alexander Gaeta, Co-Founder and President of Xscape Photonics.

Xscape Photonics was started in 2022 by three Silicon Photonics pioneers, a laser expert from Columbia University and a founding member of the Silicon Photonics team at Broadcom. The team is comprised of PhDs and engineers with backgrounds in the semiconductor space from time at various organizations such as Broadcom, Cerebras, InPhi, Intel, Juniper, Lumentum, Marvell and Neophotonics.

To learn more about Xscape Photonics and ChromX, please visit: https://www.xscapephotonics.com/.

About Xscape Photonics

Xscape Photonics develops photonic platform solutions designed for ultra-high bandwidth connections inside data centers to power Gen AI systems. The company's proprietary platform targets scaling of AI computing performance in an environmentally sustainable manner and is optimized for power, cost, scale and reliability. To learn more, follow us on LinkedIn or visit xscapephotonics.com.

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