Nvidia Backs Photonics with $4B — Coherent and Lumentum Get $2B Each

CNBC, Nvidia, the Wall Street Journal, Reuters, Bloomberg, Investor’s Business Daily, Market Watch, the Verge contributed to this report.

Nvidia just handed a major vote of confidence (and cash) to the optics world: the chip giant is putting $2 billion into each of two photonics firms to speed up the lasers, transceivers and silicon-photonics tech that help move huge amounts of data inside next-gen AI data centers.

The markets liked the news — the photonics names popped hard (Lumentum roughly +8% and Coherent about +13% in the wake of the deal), while Nvidia ticked up too. Those moves reflect big bets that light-based links will be crucial for the AI infrastructure buildout.

What’s in the deals? Multi-year strategic pacts, multibillion-dollar purchase commitments and priority access to future production capacity. The investments come with long-term buying guarantees, and part of the money is earmarked for boosting US manufacturing and R&D — including new fab capacity.

Nvidia’s CEO, Jensen Huang, framed it as a push to lock in the backbone tech for “gigawatt-scale” AI factories — basically, make sure the company can get the optical parts it needs as demand explodes. The goal: faster, more energy-efficient chip interconnects that keep data centers humming.

This is supply-chain insurance and R&D fuel in one. Nvidia gets priority access to key components, the photonics firms get capital and guaranteed customers, and investors get a clearer path for scaling optical capacity — which the industry says is essential if AI growth keeps gobbling up power and bandwidth. Expect more industrial plays like this as chipmakers try to lock down the plumbing behind tomorrow’s AI systems.