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If those connections stay too dependent on copper and electrical signals, power usage and performance limits could become a serious obstacle to scaling AI. As a result, Nvidia has announced $2 billion investments in Lumentum (LITE), Coherent (COHR), and Marvell (MRVL) since early March, all of which are working on photonics technology. It also said it would invest $500 million in Corning (GLW) for advanced optical connectivity and joined Ayar Labs’ $500 million funding round. Analysts say that this is Nvidia’s way of making sure that the supply chain can scale before AI infrastructure hits a wall.
In addition, CEO Jensen Huang recently stated that Nvidia is starting to scale silicon photonics across its networking platforms and GPU-to-GPU interconnect technology, which means that the industry will need far more photonics capacity than exists today. Other major AI players are also moving in this direction, including AMD (AMD) and Microsoft (MSFT), which have backed or acquired companies tied to optical connectivity. Still, large-scale adoption will take time because photonics manufacturing is difficult.
