Nvidia to Invest $4 Billion in Photonics Firms to Bolster AI CPU Push
By Reuters | 02 Mar, 2026

Photonics firms Lumentum and Coherent will each receive $2 billion investment to tie them to Nvidia's diversification from GPUs into processor chips to speed up AI data centers.

Nvidia will invest $2 billion each in photonic product makers Lumentum and Coherent, as it looks to bolster its data center chips with technology that can better cater to the growing need for faster AI processors. 

Shares of Lumentum were up 5%, while Coherent rose 9% in early trading after the announcement on Monday.

At its most recent earnings conference, Nvidia executives said the company would use its large cash reserve to invest in the AI ecosystem and help boost the output of models.

Nvidia has been aggressively seeking out new technology to help boost the speed of its chips, with photonics emerging as a popular choice for many chipmakers looking to cater to higher inference requirements.

The two deals could also help the AI chip giant extend its lead in the fast-moving AI hardware industry as many top cloud providers take to building custom silicon in order to match their personal AI needs.

Custom-chip maker Marvell Technology announced the acquisition of semiconductor startup Celestial AI last year in a $3.25 billion deal to tap into its work on photonics, which uses light rather than electrical signals to create connections between AI chips.

One of Nvidia's top customers, Meta , signed a $60 billion deal with rival Advanced Micro Devices last week, fueling the need to improve performance of semiconductors to fend off competitors. 

Monday's tie-ups include multibillion-dollar purchase commitments from Nvidia and future capacity and access rights to advanced laser and optical networking products from both Lumentum and Coherent.

The investments will help the companies support research and development, capacity and operations as they build out U.S. manufacturing capabilities.

Lumentum CEO Michael Hurlston said the company will invest in a new fabrication facility to increase capacity.

(Reporting by Zaheer Kachwala in Bengaluru; Editing by Sriraj Kalluvila and Maju Samuel)