NeoLogic Secures $10M to Build Energy-Efficient AI CPUs
When Israeli startup NeoLogic first presented its vision for radically more energy-efficient CPUs designed for artificial intelligence servers, the response from many industry veterans was swift and dismissive. Avi Messica, the company’s CEO, recalls being told that their idea was simply not viable. “Most of the people that we have met say it’s impossible,” Messica told TechCrunch, adding that some even asserted, at the time, that innovation in fundamental aspects of chip design like logic synthesis and circuit design was no longer possible due to their maturity.
Undeterred, NeoLogic, a fabless semiconductor startup that designs chips but outsources manufacturing, set out to prove these skeptics wrong. Founded in 2021 by Messica and CTO Ziv Leshem, the company is developing a server CPU that employs a more simplified logic for processing information. Their design uses fewer transistors and logic gates, allowing the chip to operate faster while consuming significantly less power than conventional alternatives. Together, Messica and Leshem bring over 50 years of combined experience in the semiconductor industry, with Leshem having spent decades on chip design at companies like Intel and Synopsis, and Messica focusing on circuit design and manufacturing.
The genesis of NeoLogic, according to Messica, stemmed from a belief that the industry had prematurely declared the end of Moore’s Law—the 1960s observation that the number of transistors on microchips doubles approximately every two years. While many companies ceased efforts to further shrink transistors about a decade ago, believing there was little progress left to be made in that dimension, NeoLogic was not convinced. The startup is now actively collaborating with two undisclosed hyperscaler partners on the design of its server CPUs. The company aims to have a single-core test chip ready by the end of the year and anticipates its server CPUs will be deployed in data centers by 2027.
To fuel its ambitious development, NeoLogic recently secured a $10 million Series A funding round. The investment was led by KOMPAS VC, with additional participation from M Ventures, Maniv Mobility, and lool Ventures. These funds are earmarked for expanding NeoLogic’s engineering team and accelerating the ongoing development of its innovative CPUs.
This funding arrives at a critical juncture, as data centers globally are grappling with unprecedented strain on existing energy resources, a challenge exacerbated by the accelerating AI boom. Projections indicate that data center power usage is expected to double in just the next four years, underscoring the urgent need for more sustainable computing solutions. Messica believes that the substantial energy-saving potential of NeoLogic’s technology will make its server CPUs an irresistible proposition for the market.
The implications of such energy efficiency extend far beyond simple power consumption. “It affects everything,” Messica emphasized, highlighting the broader societal impact. He noted that for next-generation data centers, NeoLogic’s chips could significantly reduce construction costs and capital investment by roughly 30%. Furthermore, the technology promises to decrease water usage, a growing concern for large-scale data center operations. This comprehensive positive impact on cost, resource consumption, and environmental footprint, Messica explained, has been the core vision driving NeoLogic’s mission since its inception five years ago.