March 3, 2026: Santa Clara, CA: NVIDIA has announced a major strategic push into optical technology for next-generation artificial intelligence systems, committing $4 billion across multiyear investment deals with two leading U.S. optics firms, Lumentum and Coherent.
The agreements, which allocate $2 billion to each company, are designed to accelerate research, expand manufacturing capacity in the United States, and help remove key performance bottlenecks in data centres that support AI workloads. As traditional electrical interconnects struggle with speed and energy efficiency demands, NVIDIA is betting on silicon photonics, a system that uses light, not electrons, to carry data, to carry the next wave of AI compute.
At the announcement of the Lumentum partnership, NVIDIA founder and CEO Jensen Huang described the scale of the transition.
“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,” Huang said.
These “AI factories” refer to the sprawling clusters of servers and GPUs that power large-scale AI training and inference. In these facilities, optical interconnects, enabled by lasers and silicon photonics, help transmit massive quantities of data between chips with far greater speed and lower power consumption than traditional copper lines.
NVIDIA Invests Heavily in Optical Partners to Scale AI Systems
Lumentum’s CEO Michael Hurlston said the agreement strengthens both companies’ commitment to next-generation optical solutions, including a planned facility to increase production capacity and speed innovation.
“This multiyear strategic agreement reflects our shared commitment to advancing the optics technologies that will power the next generation of AI infrastructure,” Hurlston said.
Coherent, a long-standing partner of NVIDIA’s that has supplied components for more than 20 years, will broaden its product contribution under its new agreement. Coherent CEO Jim Anderson called the expanded relationship a “key enabler” for future AI data centre designs.
“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 centres of the future,” Anderson said.
Analysts say the deals underscore how critical optical components have become in combating the physical limits of electrical signaling inside data hubs. As server racks grow denser and AI models larger, efficient data flow becomes essential to performance, and cost.
NVIDIA’s broader business performance mirrors this computing demand. In its recent fiscal results, the company reported $68.1 billion in revenue for the quarter ended January 2026, a 73% year-over-year increase. Annual revenue for the full fiscal year hit $215.9 billion, up 65% from the prior year.
During the earnings call, Huang pointed to compute capacity as a driver of both technical progress and commercial success:
“Without compute, there is no way to generate tokens. Without tokens, there is no way to grow revenues. So in this new world of AI, compute equals revenues,” he said.
Aside from optical partnerships, NVIDIA has also been active in funding AI research, including a significant stake in OpenAI’s latest financing round.
With this $4 billion optical investment, NVIDIA appears to be reinforcing its supply chain while positioning itself at the forefront of technologies that underpin the future of AI infrastructure worldwide.
