Salience Labs Raises $125M for Optical AI Switches

Salience Labs secures $125M Series B funding to advance optical AI infrastructure, a move that positions the Oxfordshire-based photonics firm to scale its manufacturing capabilities and establish a second presence on the US West Coast. The investment round was oversubscribed and led by Bullhound Capital, with significant participation from major industry players including AMD Ventures, Intel Capital, SBI Group, Hudson River Trading, and the British Business Bank. This capital injection underscores the growing strategic importance of optical switching technology in high-performance computing environments.

Founded in 2021, Salience Labs leverages over a decade of collaborative research conducted between the University of Oxford and the University of Münster in Germany. The company’s core innovation lies in its ability to route data using light directly, bypassing the inefficiencies inherent in traditional systems. Conventional switches typically convert optical signals into electrical formats for processing before converting them back to light, a process that introduces latency and energy loss. In contrast, Salience’s approach utilizes optical circuit switching, which establishes a direct physical path for the signal itself, maintaining it in its optical form throughout the routing process.

The company has already demonstrated tangible progress in this field, showcasing a 32-port all-optical switch earlier this year, which received validation from Keysight. More recently, at the European Conference on Optical Communication (ECOC) in September, Salience revealed a more advanced 64-port version housed within a standard 1U chassis. These developments highlight the company’s rapid iteration cycle and technical maturity as it seeks to integrate into existing data center architectures.

Despite the substantial funding, the roadmap remains somewhat opaque regarding specific commercial milestones. The raised capital is intended to support the development of larger-scale 128 and 256-port switches, yet no release dates or customer names have been disclosed. Notably, Nvidia did not participate in this financing round, and no major hyperscaler has been publicly identified as an early adopter. This contrasts with the broader market landscape, where competitors like Oriole Networks are further along in deployment. Oriole is currently operating its optical circuit switching platform within the UK government’s £50 million ARIA lab, utilizing AMD chips, after raising approximately $35 million in total funding.

Market analysts predict immense growth for this sector. Dell’Oro forecasts that cumulative spending on switches for AI back-end networks could approach $1 trillion between 2026 and 2030, with more than half of that expenditure dedicated to scale-up applications. To put Salience’s valuation and funding into perspective, rival Lumilens exited stealth mode in August with over $700 million in funding at a $5.51 billion valuation, having already begun shipping products to live hyperscaler data centers. Similarly, PhotonDelta established a Silicon Valley hub in 2024, building on €1.1 billion of Dutch state investment made two years prior.

Salience Labs is also navigating a complex geopolitical and industrial policy environment. While the company expands its engineering team in California, with its CEO splitting time between the UK and the US, domestic policies may be shifting. In June, the UK Technology Secretary announced plans to prioritize purchasing AI chips from British firms to prevent them from being acquired by foreign entities, following the sale of companies like Graphcore and Alphawave to international buyers. This policy shift aims to retain critical technological assets within the UK, even as individual companies seek global expansion opportunities.