# CScale raises $145M Series C for optical interconnects in AI data centers

Digest AI · Hardware & Compute · published 2026-09-30T16:40:01Z

Canonical: https://digestai.news/story/cscale-raises-145m-series-c-to-build-optical-interconnect-for-gigawatt

## Summary

CScale, a Palo Alto-based startup, has secured $145 million in Series C funding to develop optical interconnect solutions for gigawatt-scale AI data centers. The round, led by Atreides Management and Valor Equity Partners, brings the company’s total funding to $188 million. Strategic investors NVIDIA and Intel Capital joined alongside existing backers like Sutter Hill Ventures and Maverick Silicon, signaling confidence in the technology’s potential to address critical bottlenecks in AI infrastructure.

The company’s focus is on creating resilient, high-bandwidth optical links that enable seamless data exchange between thousands of GPUs and accelerators. Current AI systems struggle with latency and failures in these interconnects, leading to wasted compute cycles. CScale’s CEO, Martin Lund, emphasizes that optical failures are inevitable but argues that compute operations should remain uninterrupted. The startup’s architecture aims to isolate faults without disrupting overall system performance, a critical requirement for next-generation AI data centers. With approximately 85 employees, CScale combines expertise from industry veterans, including Lund (former Cisco executive) and CTO Sanjai Kohli (co-founder of SiRF and Inovi).

## Key points

- CScale raises $145M Series C, total funding now $188M, with NVIDIA and Intel Capital as strategic investors
- Startup targets optical interconnects for gigawatt-scale AI data centers to reduce latency and failures
- CEO Martin Lund says design prioritizes continuous operation despite optical component failures

## Why it matters

Optical interconnects are becoming a bottleneck for AI clusters as they scale. CScale’s funding reflects investor confidence in solving reliability issues that could otherwise cripple next-gen AI data centers.

## Sources

1. [CScale Raises $145M Series C to Build Resilient Optical Interconnect for Gigawatt-Scale AI](https://unite.ai/cscale-raises-145m-series-c-to-build-resilient-optical-interconnect-for-gigawatt-scale-ai) (Unite.AI, 2026-09-30)
2. [CScale, which is developing optical interconnect for accelerators, emerges from stealth with a $145M Series C led by Atreides, Valor Equity, and Premji Invest](https://gamesbeat.com/cscale-comes-out-of-stealth-with-145m-to-build-interconnect-for-gigawatt-scale-ai) (gamesbeat.com, 2026-09-30)

## Cite

Digest AI, "CScale raises $145M Series C for optical interconnects in AI data centers", 30 September 2026, https://digestai.news/story/cscale-raises-145m-series-c-to-build-optical-interconnect-for-gigawatt

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