Chip startups using light instead of wires gain momentum

Computers using light instead of electricity for processing are gaining traction. And startups that have solved the engineering challenge of using photons in computer chips are getting big funding. Researchers say the technology could drive innovation in everything from quantum computing to driverless cars to artificial intelligence.

California-based startup Ayar Labs is developing a technology called silicon photonics, where data is transferred among computer chips by optical rays. Ayar Labs recently raised a whopping $130 million from investors, including chip giant Nvidia.

So what’s the hype about? Over the past decades, the traditional transistor-based silicon chip has increased computing power exponentially. But as transistors reach the width of several atoms, shrinking them further while making them more powerful is challenging.

Another problem is that many large machine-learning algorithms can use thousands of chips for computing, and there is a bottleneck on the speed of data transmission between chips using current electrical methods.

All of this is pushing the industry to seek new solutions to handle increasingly heavy AI computing needs. And here comes the light at the end of the tunnel…pun intended.

Light has been used to transmit data through fiber-optic cables for decades, but bringing it to the chip level was difficult. Until now.

Silicon photonics startups, like Ayar Labs, raised over $750 million in 2021. That’s according to data firm PitchBook. It expects silicon photonics to become common hardware in data centers by 2025 and estimates the market will reach $3 billion by then.