Exclusive | Startup Making AI Chips More Power-Efficient Raises $500 Million

Ayar Labs, a decade-old chip startup backed by Nvidia NVDA 2.99%increase; green up pointing triangle and Advanced Micro Devices AMD -0.79%decrease; red down pointing triangle, has raised $500 million from investors including Neuberger Berman, MediaTek, Qatar Investment Authority and others in a funding round that values it at $3.8 billion.

The company, which is trying to revolutionize the way semiconductors are connected inside server racks, has developed some of the most advanced applications of a technology known as co-packaged optics, its investors and executives say.