Nvidia CEO Jensen Huang highlights shift from copper to optical interconnects for AI data centers, positioning photonics suppliers like Lumentum Holdings as central to solving infrastructure bottlenecks.

Nvidia CEO Jensen Huang recently cited physical limits to copper and pointed to photonics suppliers, including Lumentum Holdings, as important to addressing AI infrastructure bottlenecks. Nvidia has committed significant investment to Lumentum and other optical networking firms to support next-generation AI data center buildouts.

The shift involves moving from copper to optical interconnects for data center connectivity. Lumentum's work includes indium-phosphide laser development and co-packaged optics (a photonics integration technology for high-speed data transmission).

Lumentum's stock closed at $1,029.15, with a 166.5% gain year to date and a reported US$2 billion investment from Nvidia into Lumentum and peers. The company now faces execution pressure: it must translate preferred supplier status into sustained orders and healthy pricing while competing with Coherent, Marvell, Broadcom, and others for the same AI optics spending.