Startup Celestial AI secures $250 million in funding to speed up AI computing power
Celestial AI attracts major investors as it aims to slash AI power usage
Celestial AI, a Santa Clara-based startup aiming to transform AI computing through light-based data transfer, has raised $250 million in its latest funding round.
The round was led by Fidelity Management & Research Co., with new investors including BlackRock Inc., Maverick Capital, Tiger Global Management, and Lip-Bu Tan — the latter also joining Celestial AI’s board of directors. Existing backers such as AMD Ventures, Koch Disruptive Technologies, Temasek, and Porsche Automobil Holding SE also participated, reports Bloomberg.
With this funding, Celestial AI’s valuation has soared to over $2.5 billion. Since its founding in 2020, the company has raised more than $515 million, positioning it among the top contenders in the race to reduce the power demands of AI computing.
Competing in a High-Stakes Market
Celestial AI is competing with well-funded rivals like Lightmatter Inc., which raised $400 million last year at a $4.4 billion valuation, and Ayar Labs Inc., which became a unicorn following a $155 million funding round.
These companies are developing technologies aimed at using light to move data faster and more efficiently than traditional copper-based systems. The startup’s silicon photonics device enables AI processors and high-bandwidth memory chips to communicate directly through light, significantly reducing power usage and increasing data transfer speeds.
CEO David Lazovsky noted that their technology operates at higher temperatures than competing devices, allowing it to sit close to power-intensive chips without overheating.
Celestial AI plans to use the new capital to commercialize its technology, with mass production slated for 2027. Lazovsky emphasized the company’s focus on a niche clientele, targeting the eight companies that control over 90% of the trillion-dollar AI infrastructure market. “We can use our technology platform as an architectural toolbox and customize solutions for them to give them exactly what they want,” he said.
Reminder, Chinese AI startup Zhipu AI has secured more than 1 billion yuan ($137.22 million) in fresh funding, just months after raising 3 billion yuan ($412 million) in December.
