Salience Labs raises USD $125m in Bullhound-led round

Salience Labs has raised USD $125 million in a Series B funding round led by Bullhound Capital.

The Oxford-based photonic chip company said Intel Capital, AMD Ventures, SBI Group, Hudson River Trading and British Business Bank joined the round, alongside existing investors including Applied Ventures, Oxford Science Enterprises, Cambridge Innovation Capital and Silicon Catalyst Ventures.

As part of the investment, Callum Stewart, Principal at Bullhound Capital, will join Salience Labs' Board of Directors.

The funding will be used to expand development of its optical circuit switching technology, increase volume manufacturing and grow its US presence, including in Silicon Valley.

Salience Labs develops photonic networking chips for AI datacentre infrastructure. Its technology is designed to reduce networking delays and other constraints as operators connect large numbers of GPUs across multiple racks.

The market is attracting growing investor attention as spending on AI infrastructure rises. Salience Labs cited a Dell'Oro Group forecast that cumulative spending on datacentre switches used in AI back-end networks will approach USD $1 trillion over five years, with scale-up networks expected to account for more than half the market by the end of that period.

The funding follows a live demonstration of a 64-port all-optical photonic switch, which the company described as a first for silicon photonics optical circuit switching. The new capital will also support development of 128-port and 256-port versions.

Founded in 2021, the company says its switching technology is based on more than a decade of silicon photonics research linked to the University of Oxford and the University of Münster.

Investor backing

Vaysh Kewada, Chief Executive Officer and Co-Founder of Salience Labs, said the company is seeing demand emerge as datacentre operators increase their use of optical links.

"OCS will play a critical role in AI datacenter networking. As customers roll out optical links in their datacenters, high-performance optical switches are needed to deliver the token economics that workloads demand. Salience Labs has demonstrated a market-leading technology: a fully integrated on-chip solution that scales well to high-volume manufacturing. This funding, alongside the support of our investors AMD Ventures and Intel Capital, will accelerate our growth into high-volume production to enable world-leading performance in AI data centers," said Kewada.

Bullhound Capital highlighted both customer interest in the technology and the strength of the management team.

"The investor base and customer relationships Salience Labs has developed really speak to the capability of the leadership: Vaysh has assembled a strong team fully focused on designing a switch architecture that both aligns with customers' near-term roadmaps but also scales with them far into the future. Bullhound Capital is proud to back this transformational company that is bringing to reality the next generation of high-performance data centers," said Stewart.

AI networking

Investment arms of chipmakers also joined the round as optical networking becomes more relevant to the design of large AI systems.

Patrick Rundell, Director at AMD Ventures, said, "AI infrastructure is increasingly being designed at rack scale, where networking has a direct impact on system performance, efficiency and economics. Salience Labs is developing a differentiated, integrated optical switching architecture aimed at addressing these challenges, and AMD Ventures is pleased to support the team as it scales its technology and manufacturing capabilities."

Intel Capital made a similar case for optical switching as AI systems grow larger and more power-intensive.

"Photonics is quickly becoming essential to scaling AI infrastructure, and optical circuit switching can unlock significant gains in performance and efficiency. Salience Labs stands out through its integrated silicon photonics architecture and proprietary optical amplification, addressing key challenges to deploying optical switching at scale," said Ananth.

Salience Labs is also working with organisations including Keysight Technologies and Tower Semiconductor as it expands manufacturing. As part of its US growth, the company plans to add a second West Coast location in Silicon Valley.