Xsight Labs Raises More than $300 Million at $2.8 Billion Valuation to Power Next-Generation AI and Cloud Networks

Xsight Labs, a fabless semiconductor company providing intelligent connectivity solutions for next-generation hyperscale, edge, and AI data center networks led by Yossi Meyouhas, Gal Malach, and the team, has announced the closing of a $300+ million funding round, establishing a $2.8 billion post-money valuation. The round was led by Fidelity Management & Research Company with participation from Aliya Capital Partners, Atreides Management, Artisan Partners, Battery Ventures, Diagonal Capital, Intel Capital, Key1 Capital, Maverick Capital, Sienna, T. Rowe Price, Union Group, and Valor Equity Partners.

Funding Supports Expanding Commercial Momentum.

Xsight Labs said the funding reflects continued investor confidence in its strategy to develop high-performance alternatives to traditional networking architectures.

The investment follows growing commercial adoption of the company's networking silicon. According to Xsight Labs, its E1 Data Processing Unit (DPU) and X2 switch have been selected by multiple global network operators for next-generation edge and network infrastructure deployments.

The company also reported that its silicon is being evaluated by Tier-1 hyperscale cloud providers and has secured a growing number of design wins with service providers and original equipment manufacturers (OEMs), further expanding its commercial footprint.

Targeting the Performance and Power Constraints of Modern Networks.

Xsight Labs is positioning its E1 Data Processing Unit (DPU) and X2 Ethernet switch as solutions for network operators and equipment vendors facing increasing demands around scale, latency, and energy efficiency across edge and data center infrastructure.

The E1 is designed to deliver line-rate 800G processing while handling millions of simultaneous network connections without packet loss. The company said the chip has completed SONiC-DASH Hero 800G validation and supports hardware-accelerated encryption at full throughput. Unlike traditional DPU architectures that rely on separate exception-handling paths, the E1 places all of its Arm Neoverse N2 cores directly within the packet processing path to maintain consistent performance across routing, telemetry, and inspection workloads.

Xsight Labs has also emphasized software openness as a key differentiator. The E1 supports standard Linux, DPDK, and SONiC environments, allowing customers to deploy existing software stacks without proprietary development frameworks. The chip operates below a 75-watt power envelope, with the company claiming significantly higher performance-per-watt compared with earlier-generation designs, making it suitable for power-constrained environments such as edge deployments, satellite communications, and mobile data centers.

The X2 complements the DPU with a fully programmable 12.8 Tbps Ethernet switching architecture. Through the company's XISA framework and SONiC integration, network operators can modify protocols and add new features through software updates rather than waiting for new hardware generations. Xsight Labs said the switch delivers deterministic sub-700 nanosecond latency while operating below 200 watts, reducing both power consumption and cooling requirements in high-density data center environments.

Funding to Expand Product Development and Global Operations.

The newly raised capital will support the next phase of Xsight Labs' growth, including continued development of its multi-generation DPU and Ethernet switch roadmap, with support for emerging Ultra Ethernet Consortium (UEC) standards.

The investment will also fund the expansion of engineering and customer support teams across the United States, Israel, Europe, and Asia as the company scales its global operations.

In addition, Xsight Labs plans to strengthen its manufacturing, supply chain, and customer delivery capabilities to meet increasing demand from Tier-1 customers and support higher-volume product deployments.