Upscale AI, an AI infrastructure networking company, raised $190 million in new funding.

Upscale AI, a Santa Clara startup, raised $190 million in a Series A-1 round, bringing its total funding to $500 million and its valuation to $2 billion—all in under 18 months. Premji Invest, a $15 billion investment fund that previously backed one of the founders' earlier exits, led the round. New investors include Nvidia, Salesforce Ventures, Temasek, and Seligman Ventures, alongside returning backers Mayfield, Tiger Global, StepStone, Maverick Silicon, and Prosperity7. The company is betting that AI represents a fundamental computing paradigm shift, much like the PC era did for Cisco and Juniper, or the cloud era for Arista and Broadcom.

The opportunity is substantial. Spending on AI data center switches is forecasted to surpass $100 billion annually by 2030, according to Dell'Oro Group, as Microsoft, Google, Meta, and Amazon race to build out AI infrastructure. The five largest tech companies will spend roughly $660 billion to $690 billion on infrastructure in 2026 alone, nearly doubling what they spent in 2025. According to Umesh Padval, managing partner at Seligman Ventures, "Legacy data center networks were designed for a pre-AI world, not for the massive, tightly synchronized scale-up required by modern AI workloads."

Upscale is solving a critical interoperability problem: graphics processing units that power tools like ChatGPT mostly cannot talk to each other efficiently unless they are all from the same manufacturer. The company is building an open-standard networking fabric that lets chips from different manufacturers work together at full speed. "We are trying to get those GPUs to talk the same language," cofounder and CEO Barun Kar said. While Nvidia's proprietary NVLink and InfiniBand technologies currently dominate AI data center networking and lock customers into Nvidia's ecosystem, Executive Chairman Rajiv Khemani does not see this as the endpoint: "The world in the future is going to be a variety of heterogeneous AI systems. It's not an Nvidia or our solution. It's a solution where everything coexists with each other."

Khemani brings significant entrepreneurial credibility. He previously founded Innovium, the only startup in a decade to meaningfully crack Broadcom's lock on networking chip market share, which Marvell acquired for $1.1 billion in 2021. Before that, he ran Intel's network processing business and served as COO at Cavium. CEO Barun Kar was a founding team member at Palo Alto Networks and oversaw Juniper Networks' entire Ethernet portfolio before joining Upscale. Sandesh Patnam, managing partner at Premji Invest, sees the whitespace in the infrastructure layer: "If you look at everything that has been done over the last three or four years—if the compute layer itself was never built for GenAI workloads, look at everything else in that stack. Networking, storage, caching—every single layer of the infrastructure was never built for this workload."

The company faces significant headwinds. Custom chip design at today's most advanced manufacturing nodes costs hundreds of millions of dollars before a product ships, and suppliers increasingly require companies to commit to and pay for production slots up to two years in advance. Upscale has scaled to several hundred employees in under a year. Competitive pressure is mounting: Nexthop AI, a direct rival, closed a $500 million Series B round in March at a $4.2 billion valuation, and both Broadcom and Nvidia have effectively unlimited R&D budgets. Additionally, the open networking standard Upscale is building on—backed by AMD, Intel, Google, Meta, Microsoft, and 80+ other companies—still needs to prove it can match Nvidia's proprietary performance in real-world AI training. When asked about an IPO, Khemani said, "An IPO would be an interesting milestone. But we think it's going to be much bigger than that."