CScale has emerged from stealth with USD $145 million in Series C funding, bringing its total funding to USD $188 million.
The round was co-led by Atreides Management, Valor Equity Partners and Premji Invest. Earlier backer Sutter Hill Ventures also participated, alongside existing investor Maverick Silicon, while Nvidia and Intel Capital joined as strategic investors.
CScale is targeting a crowded corner of the AI infrastructure market, where companies are working to improve links between accelerators in large-scale systems. Its focus is optical interconnects for AI scale-up systems that connect chips and racks so they can work together on large workloads.
The start-up argues that reliability, not just raw bandwidth, will become a bigger issue as AI data centres expand. Future gigawatt-scale facilities will rely on thousands of tightly coupled accelerators across dozens of racks, creating a scenario in which even infrequent failures on individual links become a constant operational problem across a large fleet.
CScale is designing an integrated light engine intended to contain optical failures without interrupting compute. That differs from systems that rely on replaceable lasers, where component failures can require intervention and cause downtime.
Martin Lund, Chief Executive Officer of CScale, said the company is trying to address that risk directly. "As AI scale-up domains extend across dozens of racks, optical interconnect becomes essential," Lund said.
"At that scale, reliable, predictable communication is fundamental to system economics. Easier part replacement improves serviceability, not continuity. We're designing the interconnect for continuity. Lasers will fail. Compute shouldn't," he said.
The financing gives CScale backing from both financial and strategic investors at a time when rising demand for AI infrastructure has increased interest in networking and interconnect technologies. Nvidia's involvement is notable given its central role in the AI chip market, while Intel Capital adds support from another established semiconductor group.
Leadership background
Lund leads the company after a career in networking and silicon. He previously built Broadcom's switching business into a billion-dollar operation and later held senior executive roles at Microsoft and Cadence. Most recently, he led Cisco's Common Hardware Group, which oversaw silicon, hardware systems and optics, including Silicon One.
The company was founded in 2023 by Sanjai Kohli, its Chief Technology Officer. Kohli previously co-founded SiRF, a company associated with bringing GPS technology to the mass market, and later founded Inovi, which Facebook acquired in 2014.
Investors backing the round said the company's appeal lies in its system-level approach to a technical bottleneck that is becoming more visible as AI clusters grow larger. "AI infrastructure is no longer just a compute problem. It is a systems problem," said Gavin Baker, Managing Partner and Chief Investment Officer at Atreides Management.
"As scale-up systems move toward gigawatt-class deployments, interconnect bandwidth means nothing without system reliability. Every optical failure is a compute failure. At this scale, failures are not hypothetical-they are inevitable. CScale is designing reliable scale-up optics for next-generation AI factories, unlocking the full performance of optics without trade-offs," Baker said.
Premji Invest also pointed to the company's engineering choices and management team as key reasons for its support. "CScale's strength is its architectural judgment: understanding which technical choices create value for the entire system. The team combines deep expertise across photonics, electronics, and software with the deployment experience to turn optical capability into dependable AI infrastructure," said Sandesh Patnam, Managing Partner at Premji Invest.
"At Premji Invest, we partner with teams that think big and have the discipline to build enduring companies, and CScale is exactly that. We are proud to co-lead this financing and support CScale as they bring transformative solutions to market," Patnam said.
CScale is based in Palo Alto and has about 85 employees globally. The new capital will be used to advance development and commercialisation of its optical interconnect technology for large AI systems.