NeoLogic wants to build more energy-efficient CPUs for AI data centers

When NeoLogic started building its more energy-efficient CPUs for AI servers, folks in the industry told its founders Avi Messica and Ziv Leshem that their idea wasn’t viable.

“Most of the people that we have met say it’s impossible,” Messica told TechCrunch. “Some of them told us, at the time, that the innovation is impossible because you cannot innovate in logic synthesis. You can’t innovate in circuit design. It’s too mature.”

Israel-based NeoLogic nevertheless set out to prove them wrong, and the fabless semiconductor startup has been building a server CPU that uses more simplified logic — how a chip processes information — with fewer transistors and logic gates to run faster while requiring less power.

NeoLogic was founded in 2021 by Messica, CEO, and Leshem, CTO, who together have 50 years of experience in the semiconductor industry. Leshem spent decades working on chip design at companies like Intel and Synopsis, while Messica focused on circuit design and the manufacturing side.

“We co-founded this company more than four years ago because Moore’s Law was dead,” Messica said, referring to the 1960s observation that the number of transistors on microchips doubles every two years.

Around a decade ago, Messica said, companies stopped trying to scale transistors down in size, because transistors had gotten so small, there wasn’t much more progress to be made there.

But, he says, NeoLogic wasn’t convinced. The startup is working with two hyperscaler partners on the design of the server CPUs, but Messica would not disclose their names. The company plans to have a single-core test chip by the end of the year, and hopes to get its server CPUs into data centers by 2027.

NeoLogic recently raised a $10 million Series A round led by KOMPAS VC with participation from M Ventures, Maniv Mobility and lool Ventures. The company will use the funds to expand its engineering team and continue developing its CPUs.

The funding round comes as data centers are straining existing energy resources with no relief in sight. The ongoing AI boom has data center power usage expected to double in just the next four years.

Messica hopes that NeoLogic’s energy-saving potential will help make its server CPUs too attractive for the market to ignore.

“It affects everything,” Messica said of the potential energy savings. “If you talk about next-generation data centers, it affects the construction costs; it affects the amount of capital that you’ll invest because you can shave off roughly 30% of the cost. And it affects the water usage. It has an impact on society, and basically that was our vision roughly five years ago.”