Palo Alto-based CScale announced $145 million in Series C funding Sept. 30 to develop optical connections for AI computing systems, according to its company announcement. Nvidia and Intel Capital joined as strategic investors.

The deal comes amid heavy investment in artificial intelligence. Crunchbase’s report published Monday, Oct. 5, puts third-quarter global startup funding at $159 billion, with AI companies receiving 64%. The Bay Area accounted for 24% of global investment.

Global funding fell 25% from the preceding quarter but rose 53% from a year earlier, according to Crunchbase. Its figures reflect reported data as of Oct. 2 and may change as additional deals are recorded.

Umair Khan, founding partner at Mentors Fund, who lives and works in Palo Alto, told Palo Alto Online in August that the pitches and startups reaching his fund are heavily focused on AI.

“We expect our startups to be AI native and AI ready from Day 1,” Khan said.

CScale says its technology is designed to keep data moving between AI accelerators despite optical component failures. The round brought its total funding to $188 million.

AMD announced an agreement Sept. 28 to acquire World Labs, the San Francisco AI company co-founded by Stanford researcher Fei-Fei Li, for approximately $8.2 billion. The all-stock deal is expected to close by year’s end, subject to regulatory approvals and other conditions, according to AMD.

Some local real estate agents also see AI wealth influencing the housing market. Alexander Lewicki, senior buyer specialist at DeLeon Realty Inc. in Palo Alto, said in a September Palo Alto Online report that the city’s price per square foot rose 7% in July and August, with median prices up 3.5% compared with the first half of 2026.

Lewicki attributed growing market confidence partly to AI wealth, but the report does not establish that venture funding caused those price increases.

The SF Examiner reported that 10 Bay Area companies landed in the quarter’s top 20 U.S. funding rounds, pulling in $16.7 billion combined, according to PitchBook’s separate dataset.

Emily Zheng, a senior venture-capital analyst at PitchBook, told the Examiner the quarter’s numbers look softer in comparison with the unprecedented investment levels in the first half of the year.