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AI's Next Gold Rush: Optics Powering Data
11 Jul
Summary
- AI networking market to reach $154 billion by 2028.
- Optical components are crucial for AI data transfer.
- Lumentum is a key player in AI optical networking.
The artificial intelligence sector is shifting its investment focus from solely GPUs to the critical area of networking. Goldman Sachs forecasts that the addressable market for AI networking will surge dramatically, reaching approximately $154 billion by 2028, up from $15 billion. This expansion is driven by the need for faster data transfer between AI processors, where optical technologies are increasingly replacing traditional copper connections.
Optical components, including pluggable transceivers and co-packaged optics (CPO), are expected to be the primary beneficiaries. Goldman Sachs projects that co-packaged optics could capture 59% of AI networking spend by 2028. Companies with a strong focus on optical communications, such as Lumentum, are identified as having significant revenue sensitivity to this growing demand.
