The accelerating pace of AI innovation is driving a shift from copper to optical connections in data centers, creating what could be the next big bottleneck in AI infrastructure. Marvell Technology and Broadcom lead in optical DSPs, with Nvidia investing $2 billion in Marvell and partnering to integrate its optical networking into NVLink. Lumentum Holdings holds a virtual monopoly on high-power indium phosphide lasers used in optical transceivers, while Coherent and Applied Optoelectronics provide critical transceiver infrastructure, with Applied Optoelectronics a key supplier to Microsoft. Amphenol, Corning, and Ciena supply connectors, fiber, and long-distance optical routing systems that transport data within and between data centers.
