Celero Communications has raised $275 million in a Series C funding round, elevating the company's valuation past $3 billion. Alongside the financing, the Irvine, California-based networking chip startup announced the successful validation of what it says is the industry’s first 2nm coherent digital signal processor (DSP) silicon, designed to accelerate data transmission across AI data center infrastructure.
The funding round was led by Atreides Management, Valor Equity Partners, and Alphabet's CapitalG, with continued participation from existing investors Sutter Hill Ventures and Maverick Silicon. The capital brings Celero’s total funding to $415 million since its founding in 2024. As part of the round, Gavin Baker, Managing Partner and Chief Investment Officer at Atreides Management, will join the company’s board of directors.
Scaling AI Interconnects Beyond PAM4
As hyperscalers expand AI compute clusters, traditional network connectivity is emerging as a critical bottleneck. Legacy PAM4 optical architectures are rapidly approaching their physical limits regarding bandwidth density and fiber efficiency.
To bridge this gap, Celero is positioning coherent optical connectivity as the necessary foundation for scaling AI networks up and out. Coherent transmission utilizes advanced digital signal processing and analog technology to modulate light across multiple dimensions, allowing exponentially higher data capacities over existing fiber infrastructure.
According to Celero, its newly validated 2nm DSP establishes a scalable architectural foundation for next-generation AI optical interconnects, supporting connectivity speeds from 1.6 Terabits per second (1.6T) through 3.2T. Moving to a 2nm process node enables the high-speed, low-power data transmission required by massive AI workloads without exceeding data center power budgets.
“AI infrastructure is rapidly outgrowing the capabilities of traditional optical interconnect architectures,” said Nariman Yousefi, co-founder and CEO of Celero Communications. “Our 2nm silicon validation demonstrates that coherent technology can deliver the bandwidth density, power efficiency, and scalability required for the next generation of AI networks.”
Celero states the new capital will be used to accelerateits product roadmap, fund research and development, and strengthen production readiness as it targets major cloud providers.
TechInsyte's Take
The investment in Celero highlights a critical inflection point in data center architecture: compute is no longer the sole bottleneck in AI—networking is. As AI models scale to trillions of parameters, accelerators must exchange terabytes of data across the data center with minimal latency. Traditional PAM4 optics simply cannot sustain the trajectory required for 1.6T and 3.2T data rates without massive power penalties.
The transition to coherent DSP technology, historically reserved for long-haul telecommunications, is now a requirement inside the data center. By successfully validating silicon at the 2nm node, Celero—founded by veterans of Marvell, Inphi, and Broadcom—is proving it can deliver the tight integration of advanced analog and digital processing needed to keep AI infrastructure scaling. For enterprise cloud providers and hyperscalers, coherent optics are no longer optional; they are the baseline for the next generation of AI compute.
Q&A
What does Celero Communications' 2nm coherent DSP do?
It processes digital signals for optical interconnects, allowing for vastly higher data transmission speeds (from 1.6T to 3.2T) and lower power consumption compared to older networking technologies.
Why is the industry moving away from PAM4 for AI infrastructure?
PAM4 architectures are reaching physical limitations in bandwidth density and fiber scalability. As AI workloads require faster data exchange across massive clusters, traditional PAM4 optics struggle to meet bandwidth and power efficiency demands, forcing a shift to coherent optics.
Who led Celero's Series C funding round?
The $275 million round was led by Atreides Management, Valor Equity Partners, and Alphabet's CapitalG.
What will the new funding be used for?
Celero will use the $275 million to accelerate its product roadmap, expand R&D efforts, and scale production readiness for its next-generation networking chips.
Source: Businesswire
