"Nvidia, which acquired Mellanox in 2020, has emerged as one of the largest networking vendors in the world. Nvidia's networking business generated more than $31 billion in revenue in its 2026 fiscal year. While Nvidia has resisted photonics for scale-up NVSwitch fabrics used by its rack-scale compute platforms like the GB200 NVL72, this is largely down to power consumption."
"In 2025, Nvidia unveiled its next-gen Spectrum and Quantum switches would use co-packaged optics, which integrates optical transceivers directly into the switch. This approach dramatically reduces the number of optics required by eliminating pluggable modules on the switch side, which also cuts power consumption."
"Both Coherent and Lumentum specialize in optical components, like pluggable transceivers, laser sources, optical circuit switches, and other components used in datacenter optics. The $4 billion investment was announced alongside a pair of nonexclusive multibillion-dollar purchase commitments by the GPU slinger to acquire advanced laser components and optical networking products."
Nvidia announced a $4 billion investment split equally between Coherent and Lumentum, alongside nonexclusive multibillion-dollar purchase commitments for advanced laser components and optical networking products. Both companies specialize in optical components including pluggable transceivers, laser sources, and optical circuit switches used in datacenter operations. Following the AI boom, Nvidia's networking business generated over $31 billion in revenue in fiscal 2026. While Nvidia avoids photonics for its rack-scale NVSwitch fabrics due to power consumption concerns, it embraces silicon photonics for scale-out networks connecting multiple systems. Nvidia's next-generation Spectrum and Quantum switches incorporate co-packaged optics, integrating optical transceivers directly into switches to reduce power consumption and eliminate pluggable modules.
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