Mesh Optical Technologies raises $50M for AI data center hardware

Mesh Optical Technologies, a startup founded by former SpaceX engineers, announced on Tuesday that it has raised a $50 million Series A funding round led by Thrive Capital. The company, co-founded by Travis Brashears (who serves as CEO), Cameron Ramos (President), and Serena Grown-Haeberli (VP of Product), aims to mass-produce optical transceivers. These devices convert optical signals from fiber or laser into electrical signals for computers. The founders began collaborating at SpaceX, where they developed optical communications links for Starlink satellites, before identifying limitations in the broader optical transceiver market.

The optical transceiver market is currently dominated by Chinese firms and suppliers. Mesh aims to build its supply chain outside of China to address potential national security concerns and supply chain reliance on competitive countries. Philip Clark, a partner at Thrive Capital, highlighted this geopolitical risk: “If AI is the most important technology in several generations (which we believe to be true), to have critical parts of AI data center capex run through misaligned/competitive countries is a problem.” Clark noted that in the immediate term, the startup addresses a need for improved interconnects to support the continued scaling of AI.

To challenge established U.S. suppliers like AOI—which last year won a contract worth $4 billion to provide components for AWS data center operations—Mesh has set a goal to manufacture a thousand units per day within the year. This production rate is intended to help the company qualify for bulk orders in 2027 and 2028. The startup’s design removes a component, which Ramos said could reduce GPU cluster power usage by 3% to 5%. A GPU cluster is a group of graphics processing units working together, and reducing their power consumption is highly valuable for hyperscalers (large-scale cloud computing providers) seeking efficiency. Brashears noted that a cluster with one million GPUs requires four to five times as many transceivers.

The manufacturing process presents a challenge, as automated, “lights-out” production techniques are uncommon in U.S. industry, with much of this expertise concentrated in China. Even European equipment suppliers, such as one German firm, maintain intake forms that ask for a Chinese company registration number. However, Mesh plans to co-locate design and production to lower costs. Ultimately, the founders view data centers as a starting point for a broader transition from radio frequencies (RF) to photonics, the technology of generating and harnessing light. Brashears noted that while the world has long focused on radio frequencies, the company wants to be at the forefront of the transition to photonics to eventually interconnect everything.

Why it matters

Mesh is attempting to build a non-Chinese supply chain for optical transceivers, which are critical components for AI data centers. The effort comes amid growing concerns over national security and reliance on competitive countries for essential hardware infrastructure.