We're investing in Akhetonics

Hi Everyone,

A couple quick updates!

1. We’ve updated our website to a github read.me for easy access to our deep tech investments and links to other resources (more to come)

2. In 2025 we plan to publish on a more consistent basis: deal memos for each deal, a quarterly thesis-level think-piece and our annual performance

Today, we’re excited to share our most recent investment in Akhetonics. There was some nice coverage in TechCrunch, but we’re here to break down why we’re excited about the opportunity and what it means for the world of next-generation computing. You can expect more deal memos right here, subscribe below if you want to follow along.

Akhetonics is building the first all-optical, high-performance processor. This is a big deal. From the outside, it might appear that Nvidia has “won the war” — that chip design and architecture has been figured out. Nothing left here to do here!

The reality is that high-performance computing is critical, now more than ever. In fact, demand for computing power is increasing exponentially as we witness novel AI models come online seemingly every few months. Additional exogenous pressures are impacting the chip market: supply chain, geopolitical dynamics, climate change and a consistent hunger for better performance. The world needs a successor (or at least, an alternative) to the all-powerful GPU.

Enter: the XPU!

Photonics, as the name implies, uses light instead of electronics as the computational substrate. This offers a few key benefits: maximum bandwidth at low-latency paired with extraordinary power efficiency.

Classical (electronic computing) runs into bandwidth and power bottlenecks at each point of interconnect. Hybrid electro-optical computing (using optical chips for computation) improves speed and reduces energy requirements, but still falters due to conversion points. However, when the system is fully optical — input data, logic and memory, arithmetic and output — you get substantial gains across the board:

• >100x better bandwidth than Nvidia H200

• >100x faster at executing AI models than Nvidia H200

• >50x more energy efficient than Nvidia H200

• 8x cheaper to produce than Nvidia H200

The all important question: why now? We like to think of this in two parts.

At the micro-level, the Akhetonics team is well positioned to take this market. Namely, they’ve got patent/patent-pending tech that enable them to create universal digital logic gates, complex analog math functions, quantum feed-forward and all-optical memory cells. If you want to nerd out on their tech, read their Arxiv paper titled An All-Optical General-Purpose CPU and Optical Computer Architecture.

At the macro-level, there are three parallel trends working in their favor.

1. The first is securing and re-shoring the European industrial base. The ability to produce chips domestically reduces supply chain risk, particularly a dependency on Taiwan.

2. The second is energy-related. There is increasing scrutiny on the crypto and AI sectors for their energy hungry data centers (see here) and subsequent impact on global emissions targets. Regulation aside, big tech companies are trying to cut costs on their ever-growing data center spend (Microsoft struck a deal to re-open a defunct nuclear power plant for future guarantees of cheap, abundant energy).

3. Lastly: demand. If you’re reading this I probably don’t need to provide a source. Nvidia data center revenue growth is >100% YoY with Q3’24 sales in the double digit billions. As models scale, training runs increase and user adoption multiplies there is only once direction this can go. Importantly, we’ll need alternatives and ideally step change increases in performance!

4. Bonus: Optical interconnects, error correction techniques and packaging obstacles have, for the most part, been solved (previously stalling all-optical chip development)

When hunting for “Vertical Integrators” there are three criteria:

1. Exponential indicator: fast improvement of existing physics or engineering capabilities ✅ [advances in photonics]

2. Off-path indicator: a metric that implies an overlooked, likely solvable problem ✅ [brushing up against limitations of Moore’s Law]

3. Ground zero indicator : an environment where incumbents cannot compete ✅ [Nvidia’s complex supply chain and focus on electronic transistors will make it nearly impossible to pivot]

Akhetonics checks all three and offers the closest thing to a silver bullet for performance, energy efficiency and unparalleled IP that can be produced domestically in Europe. We’re thrilled to back Michael and team as they build Europe’s chip manufacturing powerhouse!