Lumilens, an American startup specializing in optical interconnects for data centers, has raised over $700 million in a recent funding round, valuing the company at $5.5 billion. The San Jose, California-based company aims to replace some of the electrical connections used between servers with light-based systems. This information was exclusively reported by The Wall Street Journal.
The investment was led by Atreides Management, Bain Capital Ventures, Meritech, Seligman Ventures, and Spark Capital, according to the company itself. Since its founding two years ago, Lumilens has already raised over $900 million and begun shipping its equipment to a major cloud provider, whose name remains confidential.
This movement occurs amid growing demand for computational power dedicated to artificial intelligence. With the concentration of more advanced chips in data centers, the need to transfer information rapidly between processors has become a central challenge of current infrastructure.
The advancement of AI systems has intensified pressure on data centers, requiring the connection of large volumes of processors at higher speeds. Currently, many of these connections rely on copper cables, a solution recognized for its reliability and low cost, but which shows limitations when data volume and distances increase.
Lumilens is part of a group of companies seeking to solve this bottleneck through photonic technology. The proposal involves replacing electrical signals with light transmissions, using optical connections capable of transporting data via fibers.
Other corporations are also exploring this market. Lightmatter, established in 2017, has already received $850 million in investments and had a valuation of $4.4 billion in 2024. Previously, Celestial AI, founded in 2020, developed a similar methodology before being acquired by Marvell in February for $3.25 billion.
Despite the technical potential, the implementation of optical technology faces economic barriers. According to Ankur Singla, CEO of Lumilens, the necessary equipment has a significantly higher cost than copper-based alternatives.
The executive explained that the company's strategy is to reduce the cost disparity between the two models, making the replacement more practical. In addition to developing components, the startup also focuses on product manufacturing.
Singla also expressed the intention to keep production outside of China. This decision gained importance after a Reuters report indicated that the Trump administration intended to impose restrictions on the entry of certain Chinese components into data centers, including optical equipment.
Lumilens offers two main lines of solutions. One is for communication between different racks within the same data center, a process called 'scale out'. The other focuses on connecting chips within a single rack, in a configuration known as 'scale up'. The company's first commercial product is an optical transceiver, a device that converts electrical signals into light to enable data transmission via fiber optic cables. This equipment is already being supplied to a major cloud provider, which uses this technology alongside its own artificial intelligence chips.
Lumilens expects to capitalize on the progress of artificial intelligence to accelerate a transformation that the data center industry has awaited for years. Although optical technology was seen as an alternative to copper, its high price limited its large-scale adoption.



