Nvidia (NASDAQ:NVDA) moved to secure the future of AI networking on Monday, announcing twin $2 billion investments in photonic product leaders Lumentum Holdings (NASDAQ:LITE) and Coherent (NYSE:COHR).
The multi-year strategic agreements aim to accelerate research, development, and domestic manufacturing of advanced optical interconnects—the hardware required to move data at the extreme speeds demanded by trillion-parameter AI models.
The non-exclusive deals include multi-billion dollar purchase commitments from Nvidia for advanced laser components and optical networking products.
The $2 billion cash infusions will specifically support the build-out of U.S.-based fabrication facilities, ensuring a resilient supply chain as Nvidia scales its "Blackwell" and "Rubin" GPU architectures.
The announcement sent shares of both optics makers surging in premarket trading, with Lumentum and Coherent each rising more than 7% before the opening bell.
The partnership highlights a critical shift in data center architecture: as traditional copper-based electrical signals reach their physical limits, silicon photonics—which use light to transmit data—have become the essential "glue" for connecting millions of GPUs across massive clusters.
The $4 billion total investment is part of Nvidia's "extreme co-design" strategy, where the chip giant invests directly in the manufacturing capacity of its most vital sub-component suppliers.