The Italian government has awarded €211 million ($249m) to a startup developing a technology that could upgrade processing times in AI data centers.

Camgraphic’s graphene-based optical technology can deliver higher bandwidth density and much better latency performance than traditional silicon chips. It also consumes 80 percent less energy, said the University of Cambridge spin-off.

The technology is particularly effective for transferring large volumes of data between GPUs and high-bandwidth memory, which are essential to generative AI and high-performance computing.

Camgraphic said that the chips can work under different temperatures without the need for complex and expensive cooling systems.

The European Commission-approved funding will allow Camgraphic to establish a pilot manufacturing facility near Milan, expected to be operational by 2028.

It comes months after the startup received €25m ($29.5m) in private funding from CDP Venture Capital, NATO Innovation Fund, Sony Innovation Fund, Join Capital, Bosch Ventures, Frontier IP Group plc, and Indaco Ventures.

Ben Jensen, CEO of deep-tech semiconductor firm 2D Photonics, Camgraphic’s parent company, said: “This investment goes straight to the heart of what’s limiting AI today. Compute keeps getting faster, but data movement hasn’t kept pace.

“Graphene-based optical technology offers a way to move vastly more data using far less power, which is exactly what the next generation of AI systems will require.”

Antonio Avitabile, managing director, Sony Ventures EMEA, added: “The decision highlights the strategic importance of graphene photonics for the European semiconductor ecosystem and the project’s potential contribution to technological progress in the automotive, telecommunications, and aerospace sectors.”

The project is expected to create more than 150 highly skilled jobs across photonics engineering, materials science, and semiconductor manufacturing. 

Camgraphic was cofounded by Professor Andrea Ferrari, Director of the Cambridge Graphene Centre, and Dr Marco Romagnoli, previously at CNIT in Italy, in 2018.

Learn more about the data center market in Italy and Southern Europe, and meet with other executives and experts from the region at the DCN Milan event later this year