Nvidia commits ~$7B to U.S. photonics for AI data centers

Nvidia has committed roughly $7 billion to expand U.S. production of photonics and optical connectivity for AI data centers, combining equity stakes, purchase agreements and an option on Corning stock.

On March 2, Nvidia announced $2 billion investments in each of Lumentum and Coherent. Those agreements include multi-year purchase commitments and access to future manufacturing capacity for advanced lasers and optical networking components used in high-speed data transmission.

On May 6, Nvidia and Corning disclosed a long-term partnership under which Corning will raise U.S. optical connectivity manufacturing capacity tenfold, increase fiber production capacity by more than 50 percent, build three new plants in North Carolina and Texas, and create more than 3,000 jobs. Nvidia holds an equity option tied to the Corning deal that could amount to roughly $3 billion, bringing the total package near $7 billion.

Nvidia framed the program as part of what CEO Jensen Huang called the “largest infrastructure buildout” of the AI era. The company has said it is securing supplies of lasers, optical parts and fiber and the capacity to produce them at scale as AI data centers expand and require higher interconnect performance.

Photonics uses light to transmit data through lasers, optical modules and fiber. Electrical copper cabling remains common for short links, but optical links carry more data over longer distances, have lower signal loss and use less power. Copper cabling can produce more heat and higher power draw as links lengthen and system density increases.

A technical focus of the deals is co-packaged optics, which locates optical engines close to networking chips to shorten electrical paths and reduce separate pluggable transceivers. Nvidia said its Spectrum-X Ethernet Photonics switches integrate co-packaged optics directly on the switch chip and are designed for very large GPU clusters, including systems intended to scale to millions of GPUs.

The agreements combine capital investment with supply commitments. Nvidia secured purchase contracts and future capacity access from Lumentum and Coherent, while the Corning partnership links expanded U.S. manufacturing to Nvidia’s optical requirements.

The company’s disclosures include specific factory and capacity targets for Corning and contract terms with the component suppliers. The investments and agreements aim to increase the domestic supply of lasers, optical components and fiber used inside high-performance AI centers.