Xsight Labs Raises $300 Million at a $2.8 Billion Valuation
1 August, 2026
The Israeli chip startup is expanding production after securing Tier-1 design wins, including SpaceX's Starlink, as demand for AI networking accelerates
Israeli semiconductor startup Xsight Labs has raised more than $300 million in a new funding round valuing the company at $2.8 billion post-money, as it prepares to ramp production following a series of major customer wins.
The round was led by Fidelity Management & Research, with participation from both existing and new investors, including Intel Capital, Battery Ventures, T. Rowe Price, Valor Equity Partners, and Atreides Management.
According to the company, the new capital will accelerate development of its next-generation networking chips, expand its engineering workforce, and increase manufacturing capacity, supply-chain capabilities, and customer deliveries as it prepares for what it describes as large-volume orders from Tier-1 customers.
Xsight said its two flagship products—the X2 Ethernet switch and the E1 DPU—have already been selected by several global network operators and are currently being evaluated by leading hyperscale cloud providers.
One customer already disclosed publicly is SpaceX’s Starlink, which selected the X2 chip for its next-generation Starlink V3 satellites. According to previous company statements, the chip will serve as a core component of the satellites’ onboard networking infrastructure, handling traffic measured in terabits per second.
Founded in 2017, Xsight Labs was established by Israeli networking semiconductor veterans Gal Malach, Guy Koren, and Erez Shizaf. The company’s founding investor and chairman is Avigdor Willenz, one of the founders of Galileo and a key figure behind several successful semiconductor companies, including Annapurna Labs, Habana Labs, and Leaba Semiconductor.
The company now employs more than 250 people and has raised over $750 million since its inception.
Tackling One of AI’s Biggest Bottlenecks
The funding comes as networking has become one of the most critical bottlenecks in AI infrastructure.
As hyperscale data centers deploy ever-larger GPU clusters, performance increasingly depends not only on compute power but also on the ability to move enormous volumes of data between servers, accelerators, storage systems, and switches with extremely low latency and high energy efficiency.
Xsight’s flagship switching product, X2, is a 5nm Ethernet switch ASIC manufactured by TSMC. It delivers 12.8 Tbps of switching capacity, supports links of up to 800 Gbps, consumes less than 200 watts, and offers processing latency below 700 nanoseconds.
The company’s differentiation extends beyond raw performance. Xsight has developed a programmable instruction architecture called XISA, enabling customers to customize packet processing, introduce new protocols and networking functions, and modify the data plane even after deployment. The company positions this as an open and programmable alternative to more proprietary networking architectures.
Its second flagship product, the E1 DPU, is designed to offload infrastructure workloads—including networking, storage, virtualization, and security—from CPUs and GPUs. The processor delivers up to 800 Gbps of throughput and is built around 64 Arm Neoverse N2 cores.
Unlike architectures that route part of the traffic through slower processing paths, Xsight says all processing cores reside directly in the data path, allowing every packet traversing the chip to be processed at full speed.
Demand for programmable networking silicon continues to grow as hyperscalers and AI system builders seek alternatives to proprietary network architectures while improving utilization, power efficiency, and software flexibility.
Xsight competes in a market dominated by Broadcom, Nvidia (Mellanox), and Marvell, but aims to differentiate itself through a combination of high performance, energy efficiency, and greater programmability.
In that context, the latest financing represents more than another funding round. It is intended to finance Xsight’s transition from product development and technology validation to high-volume manufacturing and commercial deployment. If the company succeeds in converting hyperscaler evaluations into production orders, it could emerge as a significant new player in one of the most strategic layers of AI infrastructure.
Posted in: News
Posted in tags: Xsight Labs
