Drew Perkins has been inventing computer networking technology and building startups since the dawn of the Internet age.
Now he’s back as co-founder and CEO of the AI networking startup Eridu which officially comes out of stealth on Tuesday with an oversubscribed $200 million Series A round. The round was led by Socratic Partners, renowned VC John Doerr, Matter Venture Partners and others. Eridu has now raised a total of $230 million, the company said.
Perkins began his career in the 1980s and helped create the Point-to-Point Protocol (PPP) that became a key part of TCP/IP, the protocol on which the Internet is based. In 1999, the optical switch company he co-founded, Lightera Networks, was sold to Ciena for more than $500 million. This was followed by Infinera, which IPOd and later sold to Nokia for $2.3 billion in 2025. He also founded Gainspeed (also sold to Nokia) and, more recently, AR startup Mojo Vision.
But after OpenAI released ChatGPT, Perkins had an epiphany. In February 2023, Perkins and OpenAI CEO Sam Altman were speaking at a small conference. They started chatting and “Sam told me that what enabled AI and ChatGPT was just massive amounts of computation. Back then, I think he meant 4,000 GPUs, but now we’re talking about millions of GPUs,” Perkins told TechCrunch.
He realized from that conversation that the bottleneck to progress won’t just be access to more brands. will be the methods the chips use to communicate with each other in their systems.
“What we needed to do in networking, in the networking industry, was find a whole new way of thinking about how you build networks and build network equipment, network chips and the whole thing.”
By late 2023, Perkins had met his co-founder, Omar Hassen, whose roots are in designing networking chips for industry giants such as Broadcom and Marvell. In 2024 they founded Eridu.
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They began to rethink computer networking from the ground up starting with silicon, meaning new chips designed for artificial intelligence that incorporate more networking functions.
Eridu will eventually sell integrated systems that take the place in an AI data center that a traditional network equipment provider like Arista Networks takes in a traditional data center. These systems will replace many multi-layer optical links with on-chip communications.
Today, when more networking is needed, more boxes are added, which increases the number of hops each bit of data may need to travel and increases latency – which contributes to that delay between typing a prompt and receiving a response.
Eridu is working on a switch that puts more functions on the chip itself. “So now I save a ton of power, I save a ton of cost, and then my network is much more reliable because the optics are the least reliable part of the network,” Perkins said.
“GPU compute and memory bandwidth are improving by about 10x per year, while data center switches from Broadcom, Marvell, Cisco, etc. they still only improve 2-3 times every 2-3 years,” Perkins added.
The founders made a few calls to VCs Perkins had known over the years and brought in Wen Hsieh as a lead investor. Hsieh is the founding managing partner of Matter Venture Partners and previously helped lead Kleiner Perkins’ China investment group.
Hsieh told Doerr about Eridu, after which the legendary former Kleiner Perkins investor (who had backed one of Perkins’ previous startups) also wanted in. This sparked a VC frenzy.
“My phone rings right away,” Perkins said. “It’s been a fun time raising money for this venture … we’re very oversubscribed.”
Perkins wouldn’t comment on the valuation other than to say it’s comparable to others raising this much in a Series A round and that he thinks it’s not too low, not too high. He wants his 100 or so current employees to do well with their stock options. He also declined to comment on whether the startup had achieved unicorn status (worth more than $1 billion).
Needless to say, if Eridu can deliver on its promise to create a new kind of AI-friendly chip and system, it will be in the middle of the biggest data center build in history.
And, unlike a vibe-coded product made by a 20-year-old college dropout, Eridu’s founders have something increasingly rare in Silicon Valley these days: deep experience. All of this bodes well for the company’s future.
Other leads in the round include Hudson River Trading and Capricorn Investment Group, with participation from SBVA, MediaTek, Bosch Ventures, TDK Ventures, Eclipse and VentureTech Alliance (an investment vehicle of chip fab giant TSMC) among others.
