Chip startup Neurophos secures $110 million in funding to develop photonic processors that replace electronic computation for AI acceleration.

Neurophos Inc. has closed an oversubscribed Series A funding round worth $110 million, bringing its total amount raised to $118 million to date. The round was led by Gates Frontier and included participation from Microsoft Corp.'s venture capital arm M12, Carbon Direct Capital, Aramco Ventures, Bosch Ventures, Tectonic Ventures, Space Capital, DNX Ventures, Geometry, MetaVC Partners, Morgan Creek Capital, Silicon Catalyst Ventures, Gaingels and more.

The startup is addressing the growing shortage of AI compute capacity with an entirely new kind of AI accelerator chip called an "optical processing unit" or OPU, which integrates more than a million micron-scale optical processing elements on a single chip. Neurophos' key innovation is the development of proprietary micron-scale metamaterial optical modulators, which are 10,000 times smaller than existing photonic elements. The company's prototype chips deliver up to 100 times the performance of existing AI processors and use photons to achieve clock speeds of more than 100 gigahertz. The startup has already demonstrated performance of more than 300 trillion operations per second per watt in early tests, significantly reducing power consumption compared to traditional GPUs.

Co-founder and Chief Executive Patrick Bowen stated that "Our breakthrough in photonics unlocks an entirely new dimension of scaling by packing massive optical parallelism onto 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." Neurophos is partnering with Norwegian data center operator Terakraft to launch a real-world pilot of its optical AI accelerator in 2027, with plans to manufacture its first complete systems by early 2028. M12 Managing Partner Michael Stewart described the timeline as realistic enough to underwrite.

Holger Mueller of Constellation Research noted that "There's a lot of innovation coming from the startup camp, and Neurophos is a great example of this, trying to squeeze millions of optical processing units onto its silicon chips. The funding will help Neurophos to try and reach its next major milestone and show that it can produce and operate its OPUs in commercial quantities. The success of these efforts will help to determine if the OPU acronym becomes a household name in the same way that GPU has already become." Microsoft has emerged as one of the startup's biggest fans, with Marc Tremblay, Microsoft's corporate vice president and technical fellow of core AI infrastructure, stating that "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." The funding will accelerate delivery of the company's first integrated photonic compute system and support expansion of its Austin, Texas headquarters and a new engineering center in San Francisco.