Data center connectivity start-up Astera Labs could go public as soon as March, with the company reportedly plotting an initial public offering (IPO) that could value it at up to $4 billion.

The California-based business has apparently been meeting with prospective investors ahead of the IPO, and could publish its prospectus this month.

– Astera Labs/PR Newswire

Investment banks Morgan Stanley and JPMorgan Chase are leading the talks, according to a report in The Information which cites people familiar with the discussions.

Astera was founded in 2017 by former executives from semiconductor company Texas Instruments. It designs solutions that connect chips and other parts of a server, allowing data to move around at high speeds.

This is particularly important in cloud-based AI systems which have become popular in the last 12 months, where GPUs need to link to a server’s CPU, memory, and to the wider network. Many cloud providers and other tech companies are redesigning their data centers to accommodate AI systems, so Astera’s products are in high demand.

Its customers include the two market-leading public cloud providers, Amazon’s AWS and Microsoft Azure. The company made $50 million in the fourth quarter of 2023, and expects to report income for 2024 of between $250-$300 million, according to The Information report.

Astera was valued at $3.15 billion at the time of the last funding round, a $150m series D raise in 2022. Current investors include Fidelity Management and Research, Atreides Management, and Sutter Hill Ventures, while Intel also has a stake in the company through its Intel Capital arm.

DCD has approached Astera for comment on the report.