Austin-based Neurophos has closed an oversubscribed $110 million Series A funding round to commercialize photonic AI chips that promise to dramatically outperform traditional silicon-based processors. The round was led by Gates Frontier, with participation from M12 (Microsoft’s Venture Fund), Carbon Direct Capital, Aramco Ventures, Bosch Ventures, Tectonic Ventures, Space Capital, DNX Ventures, Geometry, Alumni Ventures, MetaVC Partners, Morgan Creek Capital, Silicon Catalyst Ventures, Mana Ventures, and Gaingels. This brings the company’s total funding to $118 million.

The semiconductor startup has developed proprietary optical processing units (OPUs) designed as drop-in replacements for GPUs in data centers. With over one million micron-scale optical processing elements integrated on a single chip, Neurophos claims its technology delivers up to 100x the performance and energy efficiency of current leading chips.

Addressing AI’s Power Crisis

As AI adoption accelerates across industries, data centers are hitting critical walls in power consumption and scalability. Traditional silicon-based GPUs struggle to keep pace with growing computational demands, driving up both costs and energy requirements. The challenge is becoming increasingly urgent as companies race to deploy larger AI models and scale inference workloads.

“Modern AI inference demands monumental amounts of power and compute. We need a breakthrough in compute on par with the leaps we’ve seen in AI models themselves, which is what Neurophos’ technology and high-talent density team is developing.”

Dr. Marc Tremblay, Corporate Vice President and Technical Fellow of Core AI Infrastructure at Microsoft

Funding Deployment and Market Strategy

The fresh capital will accelerate delivery of Neurophos’ first integrated photonic compute system, which includes datacenter-ready OPU modules, a complete software stack, and early-access developer hardware. The company plans to expand its Austin headquarters while opening a new engineering site in San Francisco to meet early customer demand.

Neurophos is positioning its optical chips to support the next generation of AI infrastructure without requiring exponential increases in energy or physical resources. The company’s technology promises to make AI more accessible and cost-effective across multiple industries by significantly reducing power consumption per compute operation.

The Physics Behind the Performance Leap

Neurophos’ core innovation centers on micron-scale metamaterial optical modulators—a 10,000x miniaturization compared to previous photonic elements. This advancement makes large-scale, manufacturable photonic computing viable for the first time in commercial applications.

“Moore’s Law is slowing, but AI can’t afford to wait. Our breakthrough in photonics unlocks an entirely new dimension of scaling, by packing massive optical parallelism on a single chip. This physics-level shift means both efficiency and raw speed improve as we scale up, breaking free from the power walls that constrain traditional GPUs.”

Dr. Patrick Bowen, CEO and Co-Founder of Neurophos

The result is what the company describes as a new class of AI accelerator: ultra-fast, energy-efficient, and adaptable to future AI workloads. By processing data using light rather than electrons, the optical chips can perform certain calculations much faster while generating less heat.

Company Background and Team Expertise

Founded by Dr. Patrick Bowen and Dr. Andrew Traverso, Neurophos brings together industry veterans from NVIDIA, Apple, Samsung, Intel, AMD, Meta, ARM, Micron, Mellanox, and Lightmatter. The Austin-based team has moved rapidly from proof of concept to preparing for commercial production.

The company specializes in developing high-performance, energy-efficient photonic AI inference chips specifically designed for datacenter deployment. Their approach focuses on practical integration with existing infrastructure rather than requiring wholesale replacement of systems.

Investor Confidence in Photonic Computing

The strong investor lineup reflects growing confidence in photonic computing as a solution to AI’s infrastructure challenges. M12, Microsoft’s venture arm, emphasized the timing and viability of Neurophos’ approach.

“As the AI industry grapples with a surge in demand that tests our ability to satisfy with compute and power, disruptive approaches to compute may open routes to sustained or accelerated systems scaling that will be needed before the end of the decade. With their approach to hyper-efficient optical computation, the Neurophos team have advanced swiftly from a working proof of concept towards a realistic plan to deliver products on a timeline we can underwrite and believe in.”

Michael Stewart, Managing Partner at M12, Microsoft’s Venture Fund

The diverse investor base spans technology, energy, and venture capital firms, bringing expertise across semiconductor manufacturing, AI infrastructure, and go-to-market strategy. Cooley LLP serves as legal counsel for the transaction.

Origianl Creator: Ekaterina Pisareva
Original Link: https://justainews.com/companies/funding-news/microsoft-backed-neurophos-raises-110m-for-photonic-ai-chips/
Originally Posted: Thu, 22 Jan 2026 15:12:29 +0000