Santa Clara–based AI infrastructure startup Upscale AI is reportedly in discussions to raise a new funding round of approximately $180 million to $200 million, reaching a valuation close to $2 billion, according to a recent Bloomberg report. While the terms are not yet finalized, the move signals continued strong investor confidence in next-generation AI infrastructure.
If completed, this round would mark the company’s third fundraising event within just seven months of its launch. Upscale AI previously secured $100 million in seed funding in September 2025, followed by a heavily oversubscribed $200 million Series A round in January 2026.
The Series A was led by prominent investors including Tiger Global Management, Premji Invest, and Xora Innovation, alongside participation from Intel Capital, Qualcomm Ventures, Mayfield, and others. To date, the company has raised over $300 million.
Upscale AI was co-founded by Barun Kar and Rajiv Khemani, both seasoned entrepreneurs with prior experience at companies such as Palo Alto Networks, Innovium, and Cavium. The company originated from work conducted within Auradine before launching independently.
Rethinking AI Infrastructure
Upscale AI’s core thesis challenges the adequacy of traditional data center networking architectures, which were designed for general-purpose computing rather than the intensive demands of AI workloads.
Its platform introduces a tightly integrated system that connects GPUs, accelerators, memory, storage, and networking into a unified, synchronized architecture. At the heart of this approach is its proprietary SkyHammer architecture, which focuses on scaling networking performance at the rack level to significantly reduce latency and eliminate bottlenecks during AI training and inference.
The company builds on open standards such as ESUN, Ultra Accelerator Link, Ultra Ethernet, SONiC, and the Switch Abstraction Interface, positioning itself as a flexible and scalable alternative to legacy networking solutions offered by incumbents like Cisco and Broadcom.
Upscale AI is also actively contributing to key industry initiatives, including the Ultra Accelerator Link Consortium, Ultra Ethernet Consortium, Open Compute Project, and the SONiC Foundation.