Exclusive: Element Labs raises funds at $4b valuation

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

The firm’s founder serial entrepreneur Avigdor Willenz turned well-known for a sequence of chip corporations that he based and bought for billions of {dollars} over nearly three many years. But market executives describe Element Labs, which is predicated in Caesarea, as “his greatest promise, and the project that is dearest to his heart at this time.”

Earlier this month, one other of his portfolio corporations, 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 Fidelity. Xsight develops communications processors for information facilities for processing AI.

But not like Xsight Labs and the opposite corporations based by Willenz, Element Labs operates in full secrecy. The firm 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 associates referring associates and never by typical channels similar to promoting on job websites and placement businesses. The assumption is that the corporate not solely operates in a really aggressive area however already has enterprise relations with a number of US cloud giants that require confidentiality. A processor for quick, important calculations

Element Labs is tackling essentially the most troublesome 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 changing into important 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 this time seen as costly and has inadequate efficiency for the challenges of AI brokers and operating language fashions that already attain trillions of parameters – the essential processing items of AI. Chip corporations like Cerebras Systems, SambaNova, which is at the moment supported by Intel, and Grok, which was acquired by Nvidia itself, are attempting to supply a brand new sort of processor, however one that’s primarily appropriate for quick calculations for important and really particular makes use of and is priced accordingly.

Element Labs is making an attempt to decrease the prices of AI processing by providing a brand new construction of servers, and basically completely different AI processing and communication chips, which it’s focusing on the most important market in AI: the cloud giants – similar to Amazon, Microsoft, Meta, language mannequin makers, similar to Anthropic and OpenAI, and neocloud corporations (corporations that hire information heart area for AI processing) together with Crusoe, Nebius and CoreWeave, that are in search of a substitute for Nvidia’s costly processor within the early phases. In these phases, skilled AI fashions are sometimes used to supply solutions to good chat engines, acknowledge photos, and even function AI brokers – a form of clever software program able to performing human duties – similar to writing software program code, compiling analysis, and producing a video.

Former accomplice appointed Intel CEO

The computing part requires cloud giants to undertake a extra environment friendly operational strategy, wherein 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. Element Labs has tried to unravel this in a number of methods: creating a particular chip for computing workloads – thought of 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.

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

Element Labs was based by a crew 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 accomplice within the funding in Habana Labs, and the brand new startup introduced in certainly one of his former colleagues, Manuel Alba-Marquez, his former accomplice at Galileo, as an early investor. Willenz’s senior place and the founders of Habana Labs open doorways for Element Labs at any massive chip manufacturing facility and any electronics firm. Willenz’s former accomplice 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 bought Habana Labs to Intel for $2 billion; Annapurna Labs to Amazon for $380 million; and Galileo to Marvell Technologies for $2 billion in 2000. Willenz instructed Globes in an interview two years in the past that he had moved to Switzerland and considerably diminished his actions in Israel, as a result of authorities’s conduct and the judicial reform. Now, it appears that evidently Willenz has returned to being extra considerably concerned in an Israeli firm.

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

Published by Globes, Israel enterprise news – en.globes.co.il – on June 29, 2026.

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