These AI Investors Are Following The Light By Giving This Startup $154M

It’s not easy wrapping your head around what Boston-based Lightmatter does exactly.

But investors get it, at least enough to give the company $154 million in its latest fundraise. The new funds have reportedly tripled the company’s valuation, in the latest string of eye-popping AI-related rounds.

Search less. Close more.

Grow your revenue with all-in-one prospecting solutions powered by the leader in private-company data.

Start Your Search

GV, the venture capital investment division of Alphabet, and Fidelity Management and Research Co. were among the round’s investors, according to reports.

What it does

Lightmatter’s products essentially do two things: Make computing faster and more energy-efficient — requirements critical to supporting the generative AI boom.

To dismiss its technology as “something that involves AI” misses the fact that the company has been operating in the artificial intelligence space before funding to the artificial intelligence space was cool.

More specifically, the startup uses light to link computer chips together and to do calculations for deep learning. Customers and data centers want the company’s product, and the generative AI craze is driving demand.

And what a boom it’s been.

Overall, $20 billion has been raised by startups using “AI” in 2023. Prior to today’s announcement, Lightmatter had raised a total of $113 million in funding over three rounds, according to Crunchbase data. Its previous funding was raised on April 6, 2021, and included Matrix Partners and Viking Global Investors as backers.

Isn’t light free?

Yes, but harnessing it requires a lot of engineering talent. Overall, light has been used for decades to move data via fiber-optic cables (think telecommunications industry). But generally light is considered better at transmitting information than electrical signals over wires. Better in this case meaning more energy-efficient.

Large tech companies want to reduce power costs (understandably) so are turning to light-based solutions. And clearly, they are willing to pay for it and investors are willing to bet on it.