Next-generation data center connectivity startup Xscape Photonics today revealed it has closed on a $44 million early-stage investment, bringing its total amount raised to date to $57 million.

Today’s Series A round was led by IAG Capital Partners, and saw backing from Cisco Systems Inc., Nvidia Corp., Altair Engineering Inc., Fathom Fund, Kyra Ventures, LifeX and OUP.

The startup is building a new kind of interconnect, a device that’s used to link the thousands of graphics processing units and other chips that populate the enormous data centers that power most of the world’s technology. According to Xscape, data centers need a better way to connect those chips, as existing interconnects are limited by their available bandwidth, which isn’t enough to cater to the most powerful artificial intelligence workloads being run by companies today.

The problem is acute: Xscape cited a 2022 study that shows how developers generally use only about 25% of a GPU’s capacity because of the limited networking capacity available.

Xscape says its new interconnects, based on a technology called silicon photonics, can deliver much greater bandwidth and therefore accelerate the performance of those GPUs. Unlike with regular interconnects, silicon photonics relies on the manipulation of light to transmit data.

Co-founder and Chief Executive Vivek Raghunathan told TechCrunch in an interview that the company’s new interconnects rely on “energy-efficient, cost-effective systems that do not exist in the industry yet.”

The startup has developed a new technique for transmitting terabytes of data using light that differs greatly from traditional interconnects, which use metal wires as the platform for sending information between chips as electric signals. The problem with metal wires is that they require lots of energy and they generate lots of heat, which is why they struggle with heavier payloads. One alternative that’s widely used today is fiber optic links, but that’s inefficient since the interconnect’s electrical data needs to be converted to optical signals and back again, creating problems with latency.

On the other hand, silicon photonics-based interconnects produce very little heat and can get by with much less power.

The startup has created what it describes as a “programmable laser” that provides a new way to link GPUs and other kinds of chips with computer memory hardware. The laser leverages various spectrums of light, or wavelengths, in order to transmit multiple data streams simultaneously across the same link, vastly increasing capacity.

The technology could eventually form the basis of much faster data center interconnects. But although it has apparently been proven in the lab, one of the challenges Xscape faces is finding a way to manufacture its interconnects at large scale. The startup reckons it can build its laser-based devices using the same equipment that’s used to manufacture microelectronics in laptops, phones and other hardware.

According to the startup, the backing of Cisco and Nvidia is especially notable. Raghunathan told TechCrunch they’re not “strategic investors,” which means they’re not customers yet, but said the fact they’re willing to fund the company proves they believe its technology is viable.

Raghunathan leads Xscape alongside three others – co-founders Alexander Gaeta, Keren Bergman and Michal Lipson, who were responsible for inventing the technique that its light-based interconnects use. Meanwhile, Raghunathan himself previously led the silicon photonics research team at Intel Corp., which is widely seen as a leader in the emerging field.

The company will use the money from today’s round to accelerate the development of its LabriX platform, which is the name for its programmable, laser-based data center interconnect technology. It says its primary goal with LabriX is to maximize the bandwidth of GPU connections.

Xscape is competing in a hotly contested industry segment, with various other rivals all pursuing their own take on silicon photonics. Besides Intel, it faces competition from the likes of Switzerland-based Lightium AG, which recently raised $7 million in funding to design and manufacture photonic integrated circuits based on a new technology called Thin-Film Lithium Niobate.

Other competitors include Hewlett Packard Enterprise Co., plus startups such as Ayar Labs Inc., Celestial AI Inc., Luminous Computing Inc. and IP Photonics Corp. IBM Corp. is also exploring the possibilities of silicon photonics.

Image: SiliconANGLE/Microsoft Designer