Optalysys raises £23m to commercialise photonic chips for Generative AI, post‑quantum workloads
This article covers Optalysys, a hardware startup, which has raised £23m in a growth funding round (described as a Series A extension) to accelerate commercialisation of its photonic chips and expand into the US market. The funding aims to scale prototype hardware and target compute-intensive workloads such as Generative AI inference and post-quantum algorithms, affecting cloud infrastructure, encrypted computation and energy efficiency.
Optalysys, a hardware startup, has raised £23 million in a growth funding round to accelerate commercialisation of its photonic chips and push into the US market. The company and its backers say the capital will be used to scale prototype hardware—described in the announcement as a Series A extension—and to target compute-intensive workloads such as GenAI and post-quantum algorithms.
Why it matters
Electronic processors are increasingly constrained by physics and energy consumption as AI and cloud workloads grow. Optalysys is attempting to address that bottleneck with light-based, or photonic, processors that combine data movement and compute on the same package. If the approach works at scale, it could offer a more energy-efficient layer for certain cloud and encryption workloads, which matters for firms wrestling with the rising cost and carbon impact of large models.
Inside the product
Optalysys develops a programmable, high-density photonic layer intended to sit alongside conventional silicon infrastructure. The company says the technology targets compute-heavy tasks where parallel throughput and lower power per operation are beneficial—examples include Generative AI inference workloads and post-quantum algorithm processing.
One specific, early application is fully homomorphic encryption, which allows computation on encrypted data without first decrypting it. Optalysys has already shipped LightLocker™ Node servers, a dedicated hardware product aimed at encrypted blockchain use cases, signalling an initial route to market through niche, high-security deployments while broader cloud integrations are developed.
Who are the investors?
The round was led by Northern Gritstone, with participation from imec.xpand, Lingotto Horizon and the UK government’s National Security Strategic Investment Fund (NSSIF).
Northern Gritstone’s backing is positioned as a vote of confidence in the team and technology; the fund has backed other deep-technology companies seeking to commercialise advanced hardware. imec.xpand brings photonics and semiconductor ecosystem expertise, while NSSIF provides a government-linked strategic anchor for technologies considered important to national capabilities. Lingotto Horizon’s participation adds further institutional support.
Duncan Johnson, CEO of Northern Gritstone, said:
Optalysys is scaling towards global success. The company is building technology for the next generation of computing and has the team, technology and commercial traction that we, as investors, want. We’re excited to support the team as they continue to commercialise their technology and deliver real-world impact across multiple industries.
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Founder perspective
Nick New, Co-founder and CEO of Optalysys, framed the raise as a step toward mainstreaming photonic computing and expanding into new markets.
Nick New, Co-founder & CEO, said:
We are at a defining moment in the evolution of computing. Photonic computing opens up fundamentally new capabilities, allowing data to be moved and processed with far greater speed and efficiency. This investment validates both the scale of the opportunity ahead and our ability to execute against it. It allows us to expand into new markets and take an important step towards making photonic computing a mainstream part of cloud infrastructure.
Robert Todd, Co-founder & CTO, highlighted market drivers and the US expansion rationale.
Robert Todd, Co-founder & CTO, said:
Recent acquisitions in the semiconductor industry have highlighted the role that photonics can play in addressing the limits of electronic computing, particularly in processing capability and power consumption, resulting from the demands of training and running even larger AI models. Optalysys’ approach uniquely combines data movement and compute within the same package. Expanding to the US is an exciting and natural next step for us, so that we can tap into its strong photonics ecosystem and the immense talent located in Silicon Valley.
The bigger picture
The funding sits at the intersection of several trends: investor interest in hardware that can lower the energy bill of AI, growing focus on computation that supports data privacy and encryption, and a broader push to diversify compute architectures beyond CMOS transistors. The involvement of NSSIF underscores the national-security and sovereign-capability angle that often accompanies investments in advanced semiconductors and photonics.
The deal also signals continuing appetite from hardware investors for companies targeting niche, high-value enterprise workloads first—such as encrypted computation and blockchain—before attempting broader cloud adoption.
Optalysys’s raise follows a period of heightened activity in photonics and semiconductor investment across Europe and the US. Its next steps—scaling production, proving performance at cloud scale and securing US partnerships—will be a useful barometer for whether photonic approaches can carve out a material share of future compute infrastructure.
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