DriveNets today announced a $410 million Series D financing round led by Bessemer Venture Partners and Atreides Management, with participation from AMD, Red Dot Capital, and existing investors including Pitango and D1 Capital. According to industry estimates, the round values the company at approximately $8.5 billion, a sharp increase from its 2022 financing, which reportedly valued DriveNets at more than $2.5 billion.

Beyond the size of the round, one detail stands out. Unlike most software companies, DriveNets says a significant portion of the capital will be used to build readily available inventory of networking platforms for large-scale AI deployments. Such language is unusual for a software vendor and suggests that DriveNets is increasingly moving beyond supplying networking software alone. Instead, the company appears to be financing infrastructure components in advance to support major customer projects. DriveNets also reports a pipeline of orders and projects exceeding $1 billion.

Founded in 2015 by Ido Susan and Hillel Kobrinsky, DriveNets set out to disrupt the traditional networking equipment market. Rather than relying on expensive proprietary routers from vendors such as Cisco Systems, Juniper Networks, and Nokia, the company developed software that allows clusters of standard switching hardware to operate as a single, large-scale carrier-grade router. The model has been adopted by major customers including KDDI, Comcast, and AT&T. According to DriveNets, AT&T now runs most of its core network on the company’s technology.

In recent years, DriveNets has extended the same architectural philosophy into AI data centers. Once known primarily as a telecom networking company, it now positions itself as a provider of a full-stack AI networking fabric, offering software, integration, workload orchestration, and networking management for large AI compute clusters.

That shift places DriveNets in more direct competition with NVIDIA. While NVIDIA has built much of its AI infrastructure strategy around InfiniBand technology acquired through its purchase of Mellanox Technologies, DriveNets is promoting an alternative based on open, multi-vendor Ethernet networking. The company argues that this approach enables customers to combine AI accelerators from different manufacturers within the same cluster, reducing dependence on a single vendor’s proprietary stack.

AMD’s participation in the funding round reflects that vision. Both companies are advocating for heterogeneous AI infrastructure, where different types of AI accelerators can operate together within the same data center environment. If DriveNets originally set out to transform how telecom operators build networks, this latest financing suggests a much broader ambition: becoming the networking layer that connects the next generation of AI infrastructure.

[Photo Credit: Shauli Lendner]