CScale Emerges From Stealth With $145 Million Series C for Fault-Tolerant AI Optical Interconnects
Backed by Nvidia and Intel Capital, the Palo Alto startup is building integrated light engines engineered to keep AI clusters running through laser failures.
Palo Alto-based CScale has come out of stealth mode with $145 million in Series C funding to build fault-tolerant optical interconnects for artificial intelligence data centers, bringing its total raised capital to $188 million, as reported by The Next Web (https://thenextweb.com/news/cscale-145m-series-c-optical-interconnect-ai).
The round was led by Atreides Management, alongside co-leads Valor Equity Partners and Premji Invest. Early backer Sutter Hill Ventures and Maverick Silicon participated, while Nvidia and Intel Capital joined as the startup's first strategic investors.
Founded in 2023 and staffed by roughly 85 employees, CScale is developing integrated light engines to link thousands of accelerators into unified compute clusters. When training and inference workloads span dozens of server racks, optical links become critical infrastructure—yet optical components like lasers carry predictable failure rates.
CScale's core architecture focuses on reliability, designed to contain optical and laser degradation so that hardware failures do not halt ongoing compute tasks. “We’re designing the interconnect for continuity. Lasers will fail. Compute shouldn’t,” chief executive Martin Lund said in a company statement.
“Every optical failure is a compute failure,” added Gavin Baker, managing partner and chief investment officer at Atreides Management.
CScale stated that the new funding will support technology development and commercialization. The startup is led by enterprise hardware veterans: Lund previously led Cisco’s Common Hardware Group overseeing silicon, hardware systems, and optics, after building Broadcom’s switching business and holding senior posts at Microsoft and Cadence. Founder and chief technology officer Sanjai Kohli previously co-founded SiRF, which commercialized mass-market GPS silicon, and later founded Inovi, acquired by Facebook in 2014.
The round aligns with surging investment in physical interconnects required to scale AI clusters. Recent sector financings include a $700 million round for Lumilens in August—also backed by Atreides—a $275 million round for Celero earlier this month, and Eliyan's $145 million Series C in July.
Sources
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