Programmable networking chip startup Xsight Labs raises $300M

UPDATED 23:16 EDT / JULY 30 2026 INFRA Programmable networking chip startup Xsight Labs raises $300M by Mike Wheatley Israeli network chip startup Xsight Labs Ltd. said today it has closed on a $300 million funding round that brings its valuation to $2.8 billion. It’s planning to use the funds to help its programmable Ethernet switches and 800-gigabit data processing units push deeper into cloud and artificial intelligence networks. Today’s round was led by Fidelity Management & Research Co., and saw 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.. Investors are making a fairly straightforward bet on Xsight. They believe AI data center networking will balloon into a $150 billion market by 2028, and Xsight’s chips, which prioritize power efficiency and programmability, are positioned to capture a meaningful slice of that growth Xsight, founded in 2017 and based in Tel Aviv, develops two key components that are used in data center networks – the E1 data processing unit or DPU and the X2 Ethernet switch, which are both designed specifically for AI connectivity. The company’s calling card is power efficiency, with its chips consuming under 200 watts for a 12.8 terabit-per-second switch. It also emphasizes customer-driven software extensions, making its chips programmable rather than fixed-function. The startup is currently developing new generations of both products, which will introduce support for the latest standards backed by the Ultra Ethernet Consortium. To develop those products, it’s planning to expand its engineering teams across its facilities in Israel, the U.S., Europe and Asia, and increase its manufacturing and supply chain capacity so it can take orders from “tier-1 customers.” The startup’s E1 chip pairs two 400G ports with 64 Arm-based Neoverse N2 cores built on a 5-nanometer process and 32 megabytes of shared cache. It also features PCIe Gen5 connectivity and encryption engines that run at line rate. Where it differs from other DPUs is that those 64 cores sit directly on the data pathway, so that routing., telemetry and packet inspection occur on every data packet instead of being handed off to a smaller exception-handling engine, enhancing overall network bandwidth with four-times the performance per watt of previous-generation designs. The chip has also achieved SONiC-DASH Hero 800G validation, sustaining more than 14 million connections per second with no dropped packets in that benchmark. As for the X2 switch, this provides 12.8 terabytes of full-duplex bandwidth at under 200-watts, plus first-bit-to-first-bit latency of less than 700 nanoseconds, with 128 lanes of 100G PAM4 SerDes. It features a reprogrammable data plane that allows it to be reconfigured for different network applications on the fly. According to Xsight, it draws 40% less power than other kinds of 12.8 Tbps switches. Xsight says the E1’s performance-per-watt is its main advantage. In AI data center racks, where accelerator chips consume the bulk of the power budget and cooling capacity, the watts spent on network fabric are all considered overheads. Xsight’s most notable customer so far is SpaceX Corp. The company said last year that the X2 has been chosen as the high-speed networking core of Elon Musk’s Starlink V3 satellites, which will be capable of moving more than 1 Tbps of fronthaul traffic and around 160 gigabytes-per-second of uplink capacity. The switch was chosen as much for its performance as its ability to operate in radioactive environments and thermal