Palomino Labs Lands $15M to Power AI's Future with MicroLED Tech

PALO ALTO, CA – April 27, 2026 – Palomino Laboratories Inc. (OTCQB: PALX), a company developing optical data communication technology, has successfully closed a $15 million private placement, a significant capital injection aimed at revolutionizing the infrastructure that underpins the artificial intelligence boom. The funding will accelerate the commercialization of its novel approach: using tiny, efficient beams of light from MicroLEDs to move data, promising to shatter the bottlenecks imposed by traditional copper wiring in modern data centers.

The company sold 3,773,853 shares of its common stock at $4.00 per share, raising a total of $15,095,412. This move signals strong investor appetite for deep-tech solutions that address the voracious energy and data demands of AI and high-performance computing.

“This capital positions Palomino Laboratories Inc. to accelerate commercialization and scale its MicroLED-based optical interconnect solutions for next-generation AI and data infrastructure,” said Jeffrey B. Shealy, Co-founder & CEO of the company. In a statement, he noted the financing “reflects strong investor confidence in Palomino’s technology and long-term vision.”

A Strategic Infusion for a Pre-Revenue Pioneer

The financing, managed by placement agent Laidlaw & Company (UK) Ltd., is a critical lifeline for the pre-revenue company. According to financial filings, Palomino reported a net loss of $3.16 million in 2025, a substantial increase from the prior year, reflecting heavy investment in establishing itself as a public entity and assembling its team. This new capital provides the necessary runway to transition from pure research and development towards product scaling and market entry.

Adding to the narrative of internal confidence, company director and secretary Richard Ogawa recently increased his personal stake, purchasing 12,500 shares at the offering price of $4.00 per share in an open-market transaction. The private placement also includes an option for additional closings, which could potentially expand the total offering to as much as $30 million, providing further financial firepower as the company advances its ambitious roadmap.

Beyond Copper: The Promise of Photonic Interconnects

At the heart of Palomino's mission is a fundamental technological shift. For decades, copper wires have been the workhorse of data transfer, but they are increasingly becoming a limiting factor in the age of AI. As processing speeds skyrocket, copper interconnects struggle with signal degradation, high energy consumption, and significant heat generation, creating a data bottleneck that throttles the potential of powerful processors and GPUs.

Palomino aims to solve this by replacing copper with light. The company is pioneering the use of Gallium Nitride (GaN) based MicroLEDs for optical interconnects. This technology facilitates chip-to-chip and rack-to-rack data communication by transmitting information via tiny, highly efficient light beams. The company's stated goal is to achieve an energy-per-bit performance of less than one picojoule, a dramatic improvement over existing electrical interconnects.

This leap in efficiency promises not only to speed up data transfer but also to drastically reduce the massive energy consumption and cooling costs associated with AI data centers. The technology is built on a strong intellectual property foundation, including patented MicroLED structures and integration processes developed in collaboration with the University of California, Santa Barbara (UCSB), a hub for photonics research. The leadership team, which includes solid-state lighting pioneer Dr. Steven DenBaars and seasoned semiconductor executive Dr. Jeffrey Shealy, brings a wealth of experience from previous successful ventures like Akoustis Technologies and RF Nitro Communications.

Navigating a High-Stakes Competitive Landscape

Palomino is not alone in recognizing the immense market opportunity for next-generation interconnects. The space is becoming a hotbed of innovation as the limitations of copper become more acute. Competitors like Avicena Tech are also developing ultra-low power MicroLED-based solutions, highlighting the technology's potential to scale AI compute clusters to thousands of GPUs.

These optical solutions are carving out a critical niche in the market. While copper remains dominant for very short-reach connections (on-chip) and traditional fiber optics are used for long-haul data transmission between data centers, MicroLED interconnects are perfectly positioned for the intermediate range—from a centimeter up to around 10-20 meters. This is the critical zone for connecting processors, memory, and accelerators within a server rack, a key bottleneck in today's AI systems.

Palomino's success will depend on its ability to differentiate its GaN-based platform and execute its commercialization strategy effectively. The challenge lies in moving from lab-proven technology to a scalable, manufacturable product that can be seamlessly integrated into the complex ecosystem of data center hardware.

Aligning with National Semiconductor Ambitions

The company’s strategy extends beyond commercial markets, aligning closely with U.S. national priorities to bolster domestic semiconductor manufacturing and technological leadership. The press release explicitly mentions the CHIPS/NIST initiatives, signaling an intent to contribute to securing onshore manufacturing and strengthening ties with federal programs.

The CHIPS Act is designed to revitalize the U.S. semiconductor industry, reducing reliance on foreign supply chains for critical components. Palomino's focus on advanced compound semiconductors—a field crucial for next-generation communications, defense, and AI—positions it as a potentially valuable player in this national strategy. Its U.S.-based R&D and stated commitment to onshore manufacturing resonate strongly with the goals of these federal initiatives.

The company's leadership team, which also includes advisors like Dr. Morgan Pattison, who has guided national strategies for the U.S. Department of Energy, reinforces this strategic alignment. This blend of entrepreneurial experience, deep technical expertise, and public policy awareness could prove vital as Palomino seeks to navigate both commercial and governmental opportunities. With this new capital secured, the focus now shifts to execution, as the company races to turn its promising photonic platform into a cornerstone of next-generation, data-intensive computing.