Nvidia invests $4 billion in photonics firms to secure supply chain for next-generation AI
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Nvidia invests $4 billion into photonics firms in a bid to bolster data center interconnect supply chains -- Lumentum and Coherent investment to fund U.S. R&D and manufacturing facilities, supports capacity rights and future access
Nvidia has pledged to invest a combined $4 billion in two photonic manufacturing firms, Lumentum and Coherent. As Reuters reports, this continues Nvidia's plans to expend capital investment with its expansive cash reserves to help build the AI ecosystem and improve the output of its models. The
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Nvidia burns $4B to light up US photonics manufacturing
Coherent, Lumentum each walk away with $2B in cash and a multi-billion purchase commitment Nvidia is dipping into its war chest once again this week, investing $2 billion each in Coherent and Lumentum to lock in supply of the vendors' respective silicon photonics technologies. The $4 billion
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Nvidia to invest $4 billion in two photonics companies
Nvidia has announced it is investing a combined $4 billion in two companies developing photonics technologies. The U.S. chip giant announced on Monday it's investing $2 billion in Lumentum and the same amount in Coherent. Lumentum is a U.S.-based company that is developing optical and photonic
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Nvidia invests $4B in co-packaged optics suppliers Lumentum, Coherent - SiliconANGLE
Nvidia invests $4B in co-packaged optics suppliers Lumentum, Coherent Nvidia Corp. today announced plans to invest in Lumentum Holdings Inc. and Coherent Corp., two publicly traded suppliers of optical networking equipment. Each company is set to receive $2 billion. Nvidia stated that the sum
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Jensen Huang's $2B bet: NVIDIA locks in laser tech to power AI's future
TL;DR: NVIDIA has committed $2 billion in a multi-year partnership with Lumentum to develop advanced optics technology for next-generation AI systems. This strategic investment aims to enhance data transfer bandwidth in AI factories, addressing performance limits of electrical connections and
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Nvidia Pumps $4 Billion Into Laser Tech To Fuel Next AI Supercycle - NVIDIA (NASDAQ:NVDA)
Nvidia Corp. (NASDAQ:NVDA) is doubling down on artificial intelligence infrastructure with a $4 billion investment in optical networking companies and a new push into 6G. Nvidia Invests $4 Billion In Photonics Partners Each agreement includes multibillion-dollar purchase commitments and future
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Nvidia to invest US$2 billion each in Lumentum, Coherent to bolster AI processors
Nvidia will invest US$2 billion each in photonic product makers Lumentum and Coherent, as it looks to bolster its data center chips with technology that can better cater to the growing need for faster AI processors. Shares of Lumentum and Coherent were up over seven per cent in premarket trading
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Nvidia Pulls Back as $4B Optics Bet Raises Near-Term Return Questions | Investing.com UK
NVIDIA (NASDAQ:NVDA) shares fell sharply in premarket trading Tuesday after the AI chip giant announced separate $2 billion investment agreements with photonics companies Lumentum Holdings (NASDAQ:LITE) and Coherent (NYSE:COHR)., bringing its total outlay to $4 billion. The deals, announced Monday,
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Coherent stock surges after Nvidia invests $2 billion By Investing.com
Investing.com -- Coherent Corp. (NYSE:COHR) shares rose 10% on Monday after Nvidia (NASDAQ:NVDA) announced a $2 billion investment in the company as part of a multiyear strategic agreement to advance optical technologies for AI data centers. The nonexclusive agreement includes a
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Nvidia to Invest $2 Billion in Both Lumentum and Coherent
Nvidia is investing $2 billion in both Lumentum and Coherent as part of agreements to help accelerate advanced optics technologies for AI infrastructure. The two separate agreements each include a multibillion-dollar purchase commitment from Nvidia and future capacity access rights for advanced
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Nvidia has committed $4 billion across two photonics manufacturers, Lumentum and Coherent, in a strategic move to secure advanced optical technologies for AI infrastructure. The investment includes multibillion-dollar purchase commitments and capacity rights for laser components that enable light-based data transfer in AI data centers, addressing bandwidth limitations as AI workloads grow.
Nvidia Secures Photonics Supply Chain with $4 Billion Investment
Nvidia has announced a $4 billion investment split equally between two US-based photonics manufacturers, Lumentum and Coherent, marking a significant strategic move to secure critical optical technologies for AI infrastructure
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. Each company will receive $2 billion alongside multibillion-dollar purchase commitments and future capacity rights for advanced laser components and optical networking products2
. The deals are structured to support R&D and manufacturing expansion at US-based facilities, with both agreements remaining non-exclusive3
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Source: Benzinga
Both Lumentum and Coherent specialize in silicon photonics technology, which uses light rather than electricity to transfer data between chips and servers. This approach offers substantially higher data transfer bandwidth compared to traditional electrical connections, which are reaching performance and power consumption limits
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. As Jensen Huang stated, "AI has reinvented computing and is driving the largest computing infrastructure buildout in history. Together with Lumentum, NVIDIA is advancing the world's most sophisticated silicon photonics to build the next generation of gigawatt-scale AI factories"1
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Source: TweakTown
Strategic Focus on Co-Packaged Optics for Data Center Interconnect
The Nvidia investment directly supports the company's adoption of co-packaged optics technology, which it integrated into its Spectrum and Quantum switch families unveiled in 2025
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. Co-packaged optics integrates optical transceivers directly into switches, eliminating standalone pluggable modules and dramatically reducing both hardware requirements and power consumption4
. While Nvidia has resisted photonics for scale-up NVSwitch fabrics due to power considerations—CEO Jensen Huang noted that sticking with copper saved 20kW on the 120kW GB200 NVL72 system—the company has fully embraced optical components for scale-out networks that connect multiple systems for distributed AI workloads2
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Source: The Register
Lumentum, which generated $665.5 million in revenue last quarter, produces CPO-optimized laser modules that generate 1311-nanometer light beams with integrated temperature management
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. Coherent recently introduced laser emitters specifically designed for co-packaged optics systems alongside fiber-optic networks and development tools4
. Jim Anderson, CEO of Coherent, emphasized the partnership's significance: "This strategic relationship underscores Coherent's role as a key enabler of next-generation AI data center infrastructure. We are proud to expand our 20-year relationship with NVIDIA"1
.Addressing Supply Chain Bottlenecks and Future Constraints
Nvidia's networking business generated more than $31 billion in revenue in its 2026 fiscal year, establishing it as one of the world's largest networking vendors following its 2020 Mellanox acquisition
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. The investment in US manufacturing capacity for optical components appears designed to prevent future supply chain bottlenecks similar to those that emerged during the 2025 memory shortage, which affected everything from glass cloth to PCB drill bits1
.The timing follows Nvidia's recent $30 billion contribution to OpenAI's $110 billion funding round, demonstrating continued aggressive reinvestment in AI infrastructure
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. Rather than pursuing exclusive rights or full acquisitions—both companies' valuations are a fraction of Nvidia's quarterly profits—the chip giant is securing capacity while allowing suppliers to serve other customers1
. This approach mirrors Nvidia's broader investment strategy, which has included stakes in CoreWeave, OpenAI, Oracle, Intel, Synopsys, and Nokia1
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Competitive Landscape and Future Implications for AI
The investment signals that photonics will become increasingly critical as AI infrastructure scales. Industry observers, including companies like Ayar Labs and Lightmatter, predict that chip designers will eventually adopt silicon photonics interconnects even for scale-up networking, potentially connecting fiber-optic cables directly to each GPU as bandwidth demands continue escalating
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. Jensen Huang has described optics as becoming as critical as GPUs themselves for future AI factories5
.While Nvidia maintains clear market leadership in AI hardware, competition is intensifying. AMD recently signed a $60 billion deal with Meta for next-generation AI data centers, and Marvell's Celestial AI acquisition demonstrates other companies recognizing optical technologies as essential for networking infrastructure
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. The Bill Gates-backed Neurophos is developing AI chips using photonics to accelerate beyond current GPU capabilities1
. Both Coherent and Lumentum shares jumped more than 10% following the announcement4
.References
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