Celero Communications Reaches $3B Valuation Following $275M Funding Round

Networking chip startup Celero Communications has secured $275 million in Series C funding. This investment pushes its valuation past $3 billion as the company pivots to 2nm coherent digital signal processing (DSP) technology to address AI infrastructure bottlenecks.

The capital injection brings Celero’s total funding to $415 million. This follows the company's successful validation of its 2nm coherent DSP silicon, a component designed to facilitate connectivity speeds between 1.6T and 3.2T for AI optical interconnects.

"Networking is now growing faster than compute, and connectivity is one of the most critical challenges in scaling AI infrastructure. The transition from PAM4 to coherent represents a fundamental shift in how the next generation of scale-up, scale-out and scale-across AI systems will be connected," said Gavin Baker, Managing Partner and Chief Investment Officer at Atreides Management, in a statement.

Transitioning From PAM4 to Coherent DSP

The funding round was led by Atreides Management, Valor Equity Partners, and CapitalG. Existing investors Sutter Hill Ventures and Maverick Silicon also participated.

Historically, data center interconnects have relied on PAM4 (Pulse Amplitude Modulation 4-level) signaling, which is efficient for shorter distances. As AI model sizes expand and data centers grow in physical scale, the signal degradation inherent in PAM4 becomes a limiting factor. Coherent DSP technology, traditionally reserved for long-haul telecommunications, uses advanced modulation to transmit more data over optical fibers. It offers better reach and power efficiency at higher bandwidths.

"AI infrastructure is rapidly outgrowing the capabilities of traditional optical interconnect architectures. 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," said Nariman Yousefi, co-founder and CEO of Celero Communications.

Scaling AI Infrastructure

The shift to 2nm process nodes allows for higher transistor density. This is critical for integrating the complex signal processing required for coherent optical links. By moving this architecture into the data center, Celero aims to overcome the physical limits that have constrained bandwidth in massive AI clusters.

"Celero’s breakthrough 2nm coherent DSP technology provides the essential optical foundation that allows AI infrastructure to scale up and across massive data centers, overcoming the physical limits of last-generation technologies," said James Luo, General Partner at CapitalG and member of the Celero board.

As AI clusters grow, the ability to move data between GPUs efficiently has become as significant as the compute performance of the chips themselves. The industry is focused on optical interconnects to bridge the gap between compute units, making firms like Celero central to the physical expansion of AI data centers.