SAN FRANCISCO, April 10 (Reuters) - NEye Systems, a

startup developing a new kind of networking chip for

artificial intelligence data centers, on Thursday raised $58

million in venture financing in a round led by CapitalG, a

growth-stage fund backed by Alphabet.

Emeryville, California-based nEye is developing a chip that

taps optical technology to send information between AI chips in

the form of light rather than electrical signals, a field that

chip giants such as Nvidia ( NVDA ) and startups alike are chasing

because it could lower energy use for AI data centers.

But energy efficiency is only part of nEye's goal. The

startup is focusing on a type of chip called an optical circuit

switch, which allows the owner of a data center to change how

its computers are connected on the fly.

That can help improve the data center's performance by

selecting the best way to string computers together based on

whatever software it happens to be running. Alphabet's Google

used such chips several years ago to construct an AI

supercomputer that it claimed beat Nvidia's ( NVDA ) then-current

offerings, but its chips were proprietary and not available to

the wider market.

NEye is now taking that concept and developing a chip for

the rest of the market.

"Google is a pioneer. They led the way," said Ming Wu, one

of the firm's co-founders and also a professor at University of

California Berkeley. "Other AI companies, other hyperscaler AI

data center operators, they will be looking to acquire some of

this technology rather than developing it themselves."

Neye has made prototype chips and expects to have samples of

production chips next year but has not disclosed when it expects

to ship in large volumes.

James Luo, the general partner at CapitalG who led the

investment, said that even if the current AI data center boom

does not last, the nEye chip's advantages in energy efficiency

and flexibility also apply to more traditional data centers.

"The beauty of it is as applicable to both models," Lou

said.

NEye has raised $72.5 million to date, and its other

investors include M12, Microsoft's ( MSFT ) venture fund, Micron

Technology ( MU ), and Nvidia ( NVDA ), among others.