NEW YORK, March 4, 2026 — Nvidia said it will invest $2 billion each in photonics suppliers Lumentum and Coherent to strengthen optical components for its AI data center chips, Reuters reported.
The multiyear agreements include multibillion-dollar purchase commitments and future capacity rights for advanced laser and optical networking products, the companies said in their announcements, Reuters and CNBC reported.
Why photonics now
Photonics uses light rather than electricity to move data, an approach Nvidia and its partners say can boost bandwidth and energy efficiency in the AI infrastructure buildout, CNBC said.
In a statement about the Lumentum deal, Nvidia said the $2 billion investment will support research, capacity and U.S.-based manufacturing, and Lumentum said it plans a new fabrication facility to expand output, Nvidia Newsroom (Lumentum) noted.
For Coherent, Nvidia said the partnership expands supply and deepens R&D on advanced optics to scale next-generation AI data center architecture, Nvidia Newsroom (Coherent) said.
Supply chain and competition
Nvidia CEO Jensen Huang said the collaborations are aimed at building “gigawatt-scale AI factories” with silicon photonics, highlighting how optics has become foundational to the next wave of AI infrastructure, Nvidia Newsroom (Lumentum) according to the company.
The investments also drew a market reaction, with Lumentum and Coherent shares jumping on the news while Nvidia’s stock also moved higher, CNBC reported.
What it means for AI hardware
Reuters said Nvidia is leaning on photonics to keep its lead in a fast-moving AI hardware race as more cloud providers design custom chips, while rival suppliers pursue similar optical technologies, Reuters reported.
Coherent said the expanded relationship will give Nvidia broader access to multiple product families as it builds AI data centers, describing the deal as an extension of a long-running partnership, GlobeNewswire said.
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