Oxford-based chip startup Salience Labs has secured $125m (£94m) from a group of high-profile investors, including Intel and AMD, as the scramble to construct AI data centres places mounting strain on power grids.
The funding round, led by Bullhound Capital, is set to accelerate the British firm's production of photonic chips — devices that harness light rather than electrical signals to transfer data between computing systems.
Addressing AI data centre energy demands
The technology has been developed to address the enormous energy demands of increasingly powerful data centres, which represent one of the most significant obstacles facing the AI sector.
AMD Ventures, Intel Capital, SBI Group, Hudson River Trading and the British Business Bank all took part in the Series B round.
Salience intends to deploy the capital to scale up its manufacturing capabilities and bolster its foothold in Silicon Valley, as it positions itself to supply the infrastructure driving the global AI boom.
Optical switching to cut power use
In contrast to conventional networking equipment, which depends heavily on electrical signals, the company's optical circuit switching (OCS) technology keeps data moving as light, with the goal of cutting power consumption and reducing delays. The approach could enable data centres to channel a greater proportion of their constrained electricity supply towards running AI models, rather than shuttling information between chips and servers.
"OCS will play a critical role in AI datacenter networking", said Vaysh Kewada, chief executive and co-founder of Salience Labs. "As customers roll out optical links in their datacenters, high-performance optical switches are needed to deliver the token economics that workloads demand."
UK grid constraints and investor interest
The investment arrives at a time when Britain's aspirations to establish itself as a leading global AI hub are being constrained by high electricity costs and challenges in securing access to the national grid.
Demand for data centre connections has intensified as technology firms compete to secure sufficient power for AI infrastructure.
According to figures cited in a recent Ofgem consultation, the UK's electricity connection queue tripled from 41 gigawatts to 125 gigawatts between November 2024 and June 2025.
The regulator has put forward stricter requirements for data centre developers seeking access to the queue, including significant upfront financial commitments, aimed at preventing speculative ventures from obstructing grid access.
Meanwhile, some developers are exploring the option of constructing their own power generation facilities to circumvent protracted connection delays. These pressures have rendered technologies capable of reducing energy consumption increasingly appealing to investors and the world's largest chipmakers.
Growing interest in British semiconductor firms
Salience's latest funding round also underscores mounting interest in British semiconductor firms developing the infrastructure required to underpin AI, rather than the models themselves. Earlier this year, Oxford-founded chip startup Fractile raised $220m from backers, including Peter Thiel's Founders Fund, as it builds technology aimed at delivering faster and more cost-effective AI computing.
The investment from AMD and Intel gives Salience backing from two of the sector's largest semiconductor giants as it progresses towards commercial-scale production.
Callum Stewart, principal at Bullhound Capital, said the firm had created technology able to satisfy both the current and future requirements of data centre operators.
