Investors just wrote a $275 million check to Celero, valuing the two-year-old networking chip startup at north of $3 billion. The round - to be disclosed Tuesday - was co-led by Atreides Management with Valor Equity Partners and CapitalG, the venture capital arm of Alphabet Inc. Celero's board will add Gavin Baker, who is Atreides' managing partner and CIO.
Celero designs coherent digital signal processors that move data for AI systems over fiber at higher speeds and across longer stretches. The chips are intended to tie together nearby data centers and to link racks inside a single facility, stitching multiple AI systems into a larger cluster.
"As these systems grow, they need to move more data at a faster rate and cover greater distance over fiber optic cable, and the existing optical transmission technology is hitting a limit," Nariman Yousefi - Celero's president and CEO - said. "The transition to coherent technology is absolutely required to enable all this future scaling for AI."
The pair - Yousefi and co-founder Oscar Agazzi - are veterans of networking and have collaborated at five companies, most recently holding executive roles at Marvell Technology Inc. He previously spent 17 years at Broadcom Inc., where he at one point led the networking division.
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Yousefi said Celero has introduced several innovations to boost speed and reach over fiber. The firm has chosen Taiwan Semiconductor Manufacturing Co.'s 2-nanometer process, which he called the most advanced available for purchase, and the team has already confirmed the chip behaves as expected. Next up: finalize the design and start production, a shift Yousefi targets for next year.
As AI keeps pushing for faster, farther data movement, optical links are set to carry more of the load, said James Luo, a general partner with CapitalG. Today, some racks of Nvidia Corp. chips still lean heavily on copper, and the rising data demands raise the risk of losing too much information. "Light is just way more efficient," Luo said, even for "short distances."
Celero will be vying with established networking vendors such as Marvell, Broadcom and Cisco Systems Inc., while ensuring its gear plugs into other companies' systems. The target customers are the largest cloud providers.
This is another sign that plumbing for AI - the fast, efficient links between chips and data centers - is becoming just as critical as the chips themselves. If the company hits its plan to move into production next year and lands big cloud buyers, it will be one to watch alongside the incumbents building the backbone of AI infrastructure.
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