LightSpeed Photonics Bets On Optical Tech To Ease AI Data Centre Bottlenecks

The last two years have seen the reach of artificial intelligence (AI) expand beyond product and tech teams to consumer masses and enterprises. 

OpenAI essentially became the fastest growing consumer facing company, with ChatGPT registering 100 Mn+ just after two months of its inception in 2022. As of now, it has more than 800 Mn registered users. 

However, this also means rising demand for data centres, which power these AI applications. Globally, Goldman Sachs research predicts that by 2027 the datacentres will increase by 50%. However in India, the data centres are expected to double by 2027, and shoot off five-fold by 2030. 

Beyond the data transferred between users and applications or even between applications and the data centre, the bulk of communication actually happens inside the data centre itself. And with language and action models growing larger and inference becoming more demanding, the amount of data moving between chips, accelerators and storage is surging. 

“The links that carry this data haven’t kept pace with the strides of AI. Most of today’s systems still depend on electrical connections that slow down under heavy loads, waste a lot of energy, and take up valuable space on already crowded boards,” according to LightSpeed Photonics founder and CEO Rohin Kumar Y. 

LightSpeed’s Fix For Data Centres

And he has a point. Data centres globally already consume about 1–2% of the world’s electricity, and AI-driven facilities are expected to push that demand up by more than 50% by 2027.

While in India, the coming wave of AI data centres is expected to require over 50 TWh of additional power by 2030.

And energy consumption is just one of the factors. As AI clusters scale, these limitations show up everywhere, from training floors in hyperscale clouds to on-premise HPC setups, creating delays and physical constraints that make it harder to build dense, efficient compute infrastructure.

The industry is yet to find a scalable fix that avoids costly system redesigns. 

But Hyderabad-founded LightSpeed Photonics thinks it has one. The startup, which also has offices in Singapore, is building optical interconnects designed to move data faster within data centres and with far less power than electrical links. 

To push its optical interconnect solution toward commercial deployments, LightSpeed has raised $6.5 Mn in a pre-Series A round led by pi Ventures, with participation from 500 Global, India Accelerator, 8X Ventures, Java Capital and several Bay Area angels. 

The new capital will help the startup expand R&D, deepen work with OEM and ODM partners, and pilot its products in upcoming data centre builds. With this round, LightSpeed’s total funding stands at about $8.5 Mn, including grants.

Are Optical Interconnects The Future?

Let’s delve a little deeper into what LightSpeed Photonics is aiming to achieve.  

Instead of relying on bulky transceivers or expensive co-packaged photonics, LightSpeed’s approach uses solderable optical components that slot into existing architectures, making them easier for OEMs and data centre builders to adopt without large hardware overhauls.

These components use short-wavelength lasers to send data. The startup claims that it makes data travel up to four times faster, cuts energy use by about half, and takes up much less space on a circuit board.

Because these links sit close to the chip, they help AI and high-performance computing systems handle heavy data loads without slowing down. LightSpeed also says its tech can reduce GPU heat and make hardware design simpler, both important as AI clusters get bigger and more complex.

Its competitors include the likes of Ayar Labs, Ranovus and Celestial AI, which are already doing something similar. However, LightSpeed Photonics’ CEO Kumar says that he doesn’t see traditional silicon-photonics players as direct competitors because they are solving the problem in a fundamentally different way. 

As per Kumar, the companies are trying to embed optical components inside the silicon chip, an approach that has attracted billions of dollars in investment but is slow, expensive and has to be repeated for every new chip generation.

LightSpeed Photonics instead offers what he calls a frugal, faster and more scalable alternative: a solderable optical transceiver that can be mounted on a motherboard like any other component while still delivering the high-bandwidth advantages associated with co-packaged optics. 

According to the startup’s founder, no equivalent product exists in the market today, and this form factor has never been done before.

Keeping Pace With The AI Juggernaut

Kumar told Inc42 that the company’s goal is to “solve the data-movement problem at the board level without forcing anyone to rip up their architecture”. 

He added that “AI hardware is scaling faster than interconnects. If links can’t keep up, everything else slows down. We’re building something that slots in easily and removes a major bottleneck.”

While the startup is pre-revenue as of now, it expects to hit $3 Mn in topline in the next fiscal year. Its focus, going forward, will be to expand into the US, as its the largest market for data centres globally. 

“Globally, about 40% of data centres are still in the US, and that market will continue to grow. That’s where our initial focus is. The product is primarily targeted at the US. We did a soft launch earlier this year, and we have a couple of major events coming up in the Bay Area in February and March,” says Kumar. 

Further, the CEO said that the startup is also preparing the ground in India and other developing regions like Southeast Asia and the Middle East. He believes that these markets are set to see a surge in data-centre buildouts, which we believe will create strong demand for next-generation interconnect solutions like ours.

At the same time, many of these regions still look to US industry leaders for validation, and securing that early affirmation is something we’re actively working on.

For India, the focus is slightly different. Kumar believes that the country has made significant leaps in areas like quantum, space and deep tech, often through frugal innovation. 

“We want to drive a similar push in photonics, not just to serve local demand but also to export to the Middle East and other fast-growing economies. So we are moving on two tracks in parallel: pilots and technology approvals with major global names, and capability building in India to support scale and volume-driven manufacturing.”

Kumar says LightSpeed Photonics plans to begin manufacturing in India over the next two years as part of its volume strategy, positioning the country as a key base for both domestic demand and exports.

Edited By Nikhil Subramaniam