Exclusive: Element Labs raises funds at $4b valuation

Unique: Early-stage Israeli chip startup Component Labs, which operates in full secrecy underneath the founding group of Habana Labs, which was beforehand offered to Intel, continues to develop in stealth. “Globes” has realized that current buyers, together with insurance coverage big Constancy, have invested one other $300-400 million within the firm at a valuation exceeding $4 billion.

The corporate’s founder serial entrepreneur Avigdor Willenz turned well-known for a collection of chip firms that he based and offered for billions of {dollars} over virtually three many years. However market executives describe Component Labs, which relies in Caesarea, as “his best promise, and the undertaking that’s dearest to his coronary heart right now.”

Earlier this month, one other of his portfolio firms, Xsight Labs of Kiryat Gat, raised $300 million at a valuation of $3 billion, led by his longtime companions – Gavin Baker’s Atreides Fund and Constancy. Xsight develops communications processors for information facilities for processing AI.

However in contrast to Xsight Labs and the opposite firms based by Willenz, Component Labs operates in full secrecy. The corporate has no web site, it doesn’t have a web page on the social networking web site LinkedIn, and its executives don’t give media interviews. Hiring of staff is carried out primarily by mates referring mates and never by standard channels akin to promoting on job websites and placement companies. The belief is that the corporate not solely operates in a really aggressive subject however already has enterprise relations with a number of US cloud giants that require confidentiality. A processor for quick, essential calculations

Component Labs is tackling probably the most tough however rewarding problem within the AI market today: the necessity to present low cost and environment friendly processors for operating AI brokers and operating processes for fashions which have already been skilled by Nvidia processors. This AI processing is progressively turning into vital within the actions of AI processing facilities and imposes heavy prices on the cloud and AI giants.

Nvidia’s graphics processor, which is taken into account very efficient in coaching fashions, is at present seen as costly and has inadequate efficiency for the challenges of AI brokers and operating language fashions that already attain trillions of parameters – the fundamental processing items of AI. Chip firms like Cerebras Methods, SambaNova, which is at present supported by Intel, and Grok, which was acquired by Nvidia itself, try to supply a brand new sort of processor, however one that’s primarily appropriate for quick calculations for essential and really particular makes use of and is priced accordingly.

Component Labs is attempting to decrease the prices of AI processing by providing a brand new construction of servers, and basically totally different AI processing and communication chips, which it’s concentrating on the most important market in AI: the cloud giants – akin to Amazon, Microsoft, Meta, language mannequin makers, akin to Anthropic and OpenAI, and neocloud firms (firms that lease information middle house for AI processing) together with Crusoe, Nebius and CoreWeave, that are on the lookout for a substitute for Nvidia’s costly processor within the early phases. In these phases, skilled AI fashions are sometimes used to supply solutions to sensible chat engines, acknowledge photos, and even function AI brokers – a sort of clever software program able to performing human duties – akin to writing software program code, compiling analysis, and producing a video.

Former companion appointed Intel CEO

The computing section requires cloud giants to undertake a extra environment friendly operational method, through which the emphasis is on the variety of tokens calculated per kilowatt {of electrical} energy, and never on reminiscence bandwidth or computational energy, as within the operation of coaching a language mannequin. Component Labs has tried to unravel this in a number of methods: growing a particular chip for computing workloads – thought-about cheaper and extra environment friendly than the costly and cumbersome GPU processor; communication infrastructures designed for dense AI clusters and a number of server racks; and software program that manages the communication community and AI processing and is harking back to Mellanox’s actions in Israel.

Component Labs will not be the one firm on this subject and competes with Broadcom and Marvell available in the market for AI chips tailor-made to the precise necessities of cloud giants. Previous to the present financing spherical, the corporate had raised, in line with PitchBook, solely about $130 million, with the newest valuation given to it in 2025 being $1.1 billion. Estimates are that the corporate at present has 350 staff in Caesarea and Tel Aviv, and several other hundred extra outsourced contract employees.

Component Labs was based by a group that’s extremely wanted within the funding world – the entrepreneur and serial investor, chip billionaire Avigdor Willenz, and the founders of Habana Labs: David Dahan and Ran Halutz. Willenz was additionally a companion within the funding in Habana Labs, and the brand new startup introduced in one in all his former colleagues, Manuel Alba-Marquez, his former companion at Galileo, as an early investor. Willenz’s senior place and the founders of Habana Labs open doorways for Component Labs at any massive chip manufacturing facility and any electronics firm. Willenz’s former companion in Israel investments, Lip-Bu Tan, was solely appointed CEO of Intel in March 2025.

Wilenz is an entrepreneur and serial investor within the chip sector who has offered Habana Labs to Intel for $2 billion; Annapurna Labs to Amazon for $380 million; and Galileo to Marvell Applied sciences for $2 billion in 2000. Willenz informed Globes in an interview two years in the past that he had moved to Switzerland and considerably lowered his actions in Israel, because of the authorities’s conduct and the judicial reform. Now, evidently Willenz has returned to being extra considerably concerned in an Israeli firm.

No response to this report has been forthcoming from Component Labs.

Revealed by Globes, Israel enterprise information – en.globes.co.il – on June 29, 2026.

© Copyright of Globes Writer Itonut (1983) Ltd., 2026.