Nvidia has invested $2 billion each in Coherent and Lumentum, and $2 billion in Marvell Technology, to secure supply of optical networking and custom AI processor components for scaling AI data centers.

Nvidia announced $2 billion investments in Coherent and Lumentum in March to support their research, development, and U.S.-based manufacturing of optical networking and photonics components. Nvidia also announced a $2 billion investment in Marvell Technology on March 31 for custom AI processors and networking components.

Optical networks enable rapid transfer of large amounts of data in AI chip clusters with low latency, reducing downtime for AI accelerators. McKinsey estimates that demand for high-speed 800 Gbps optical transceivers in AI data centers will exceed production by 40% to 60% through 2027.

Lumentum stock has jumped over 1,100% over the past year, while Coherent has posted 444% gains. Marvell anticipates a 40% increase in revenue in its current fiscal year to $11.5 billion, followed by a 45% increase in the next fiscal year. Nvidia CEO Jensen Huang recently remarked that Marvell could become a $1 trillion company.