Business
March 4, 2026
Nvidia has announced a $4 billion investment, $2 billion each in Coherent and Lumentum. This Nvidia optics investment also includes multibillion-dollar purchase commitments and future capacity access rights for optical networking and advanced last products, according to the Coherent and Lumentum press releases.
The landmark Nvidia photonics deal is seen as Nvidia’s attempt to capture the AI market by attempting to eliminate one of the biggest challenges: data transfer. By replacing traditional copper connections with photonics technology, Nvidia aims to control the next decade of AI infrastructure.
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How Nvidia’s Photonics Push Redefines AI Data Center Architecture
Data transfer is one of the biggest performance bottlenecks in data centers that still rely on copper wires. Optical components help minimize it by improving the transfer speed.
As leading companies are spending billions to build data centers, Nvidia is now a step ahead with silicon photonics investments, which are high-speed and energy-efficient.
According to reports, Nvidia has so far avoided photonics technology in certain applications due to power concerns. But it is now planning to integrate co-packaged optics.
Speaking about the Nvidia Lumentum partnership, CEO of Nvidia, Jensen Huang, said,
“Together with Lumentum, NVIDIA is advancing the world’s most sophisticated silicon photonics to build the next generation of gigawatt-scale AI factories.”
Michael Hurlston, CEO of Lumentum, said,
“In support of this collaboration, we are also investing in a new fabrication facility to increase capacity and accelerate innovation. We’re excited to work together to expand what’s possible for the AI optical architectures of tomorrow.”
The Coherent Lumentum Nvidia investment marks the beginning of a new phase. It also signals an AI supply chain shift toward Nvidia, which will help it develop AI data centers of the future.
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Speaking about that, Jim Anderson, CEO of Coherent, said,
“We are proud to expand our 20-year relationship with NVIDIA by increasing their access to include multiple product families to help them build the AI data centers of the future.”
Following the announcement, Coherent’s stock price jumped 7.3%, while Lumentum’s rose 7.6%.
Looking at the bigger picture, Nvidia’s optics investment helps the company cement its position in the AI landscape. It now controls much of the supply of next-generation optical interconnects.
