NeoLogic Strives to Create Energy-Efficient CPUs for AI Data Centers

When NeoLogic started developing energy-efficient CPUs for AI servers, industry experts warned founders Avi Messica and Ziv Leshem that their idea was impractical.

“Many individuals we met said it’s impossible,” Messica told TechCrunch. “Some informed us that innovation in logic synthesis is unattainable. They insisted that you couldn’t make advancements in circuit design due to its complexity.”

Despite the doubt, Israel-based NeoLogic set out to defy this notion, establishing a fabless semiconductor startup focused on designing server CPUs that utilize simplified logic—how chips process data—with a reduced number of transistors and logic gates to achieve higher performance with lower power consumption.

Founded in 2021 by Messica, CEO, and Leshem, CTO, the pair brings together 50 years of experience in the semiconductor industry. Leshem has spent considerable time refining chip design at companies like Intel and Synopsis, while Messica specializes in circuit design and manufacturing.

“We co-founded this company over four years ago because Moore’s Law had reached its limit,” Messica noted, referring to the observation from the 1960s that the number of transistors on microchips doubles every two years.

According to Messica, about a decade ago, companies stopped trying to miniaturize transistors further as they had become so tiny that significant advancements were difficult to achieve.

However, NeoLogic was not deterred. The startup is working with two hyperscaler partners on the design of its server CPUs, though Messica refrained from disclosing their names. The company expects to have a single-core test chip ready by the end of the year and aims to launch its server CPUs to data centers by 2027.

NeoLogic recently raised $10 million in a Series A funding round, led by KOMPAS VC, with additional contributions from M Ventures, Maniv Mobility, and lool Ventures. The capital will be used to grow the engineering team and further CPU development.

This funding round arrives as data centers grapple with increasing energy demands, with no quick solutions available. The ongoing surge in AI is expected to double power consumption in data centers within the next four years.

Messica is hopeful that NeoLogic’s energy-efficient capabilities will make its server CPUs too attractive for the market to ignore.

“It affects everything,” Messica asserted about the potential energy savings. “In the context of next-generation data centers, it influences construction costs; it adjusts the required capital investment since you can cut expenses by around 30%. It even affects water consumption. These ramifications impact society, and that was our vision about five years ago.”