Santa Clara-based AI networking startup Upscale AI is reportedly in talks to raise a new round of funding at a valuation of about $2 billion, according to Bloomberg. The company is seeking between $180 million and $200 million. Final terms have not been set and the company has not commented.
If the round passes, it will be Upscale AI’s third fundraising effort since its inception seven months ago. The company raised $100 million in seed funding in September 2025, followed by an oversubscribed Series A of $200 million in January 2026.
Tiger Global Management, Premji Invest, and Xora Innovation led the Series A, with other investors including Maverick Silicon, StepStone Group, Mayfield, Prosperity7 Ventures, Intel Capital, and Qualcomm Ventures. To date, Upscale AI has raised over $300 million.
CEO Barun Kar and Executive Chairman Rajiv Khemani co-founded Upscale AI. Both men have started multiple companies and worked at companies such as Palo Alto Networks, Innovium, and Cavium, which was later acquired by Marvell. They developed Upscale AI at Auradine, Khemani’s AI and blockchain infrastructure company, and then released it to the public.
Upscale AI believes that traditional data center networking that connects commodity servers is poorly suited for AI workloads. Its platform brings together AI clusters by connecting GPUs, accelerators, memory, storage, and networking into one synchronous system. The SkyHammer architecture focuses on scaling up the network at the rack level to reduce the latency and bottlenecks that slow down AI training and inference.
The platform uses open standards such as ESUN, Ultra Accelerator Link, Ultra Ethernet, SONiC, and Switch Abstraction Interface. This provides an alternative to network systems from established companies such as Cisco and Broadcom.
Upscale AI also participates in groups such as the Ultra Accelerator Link Consortium, Ultra Ethernet Consortium, Open Compute Project, and SONiC Foundation.
