NVIDIA and Corning Sign Long-Term Agreement; Corning’s Production Capacity to Increase Tenfold

On May 6, NVIDIA and Corning announced a long-term strategic partnership. Under the agreement, NVIDIA will invest up to US$2.7 billion in Corning through warrants, with an initial tranche of US$500 million; in return, Corning will build three new manufacturing facilities in the United States, increasing its optical interconnect capacity for AI infrastructure by a factor of ten and expanding fiber-optic production by more than 50%.

Under the agreement, the two parties will establish deep strategic ties across three dimensions: capital, technology, and production capacity. NVIDIA will initially invest US$500 million and will have the right to subscribe for 15 million shares of Corning’s common stock at a price of US$180 per share, with total investment potentially reaching up to US$2.7 billion. In addition, Corning will build three dedicated manufacturing facilities in North Carolina and Texas, which are expected to reach full production within two to three years and will exclusively supply high-performance optical fiber, connectors, and photonic components for NVIDIA’s AI clusters.

NVIDIA’s foray into the optical communications sector is driven primarily by the interconnect bottlenecks currently constraining AI computing power. Training large models with hundreds of billions of parameters and deploying ultra-large-scale compute clusters place stringent demands on intra-data-center interconnect bandwidth, transmission latency, and energy efficiency. Traditional copper cabling suffers from severe signal attenuation and significant electromagnetic crosstalk at high speeds, while also exhibiting high power consumption and limited effective transmission distances.

The underlying objective of this investment is to advance the next-generation core technology for computing power interconnects: Co-Packaged Optics (CPO). This technology directly packages and integrates optical engines with GPU chips, reducing the distance over which electrical signals must travel from centimeters to millimeters and significantly cutting down on the number of optoelectronic conversion stages. According to Vlad Galabov, an analyst at research firm Omdia, by relocating the optical conversion process right next to the chip, energy waste can be dramatically reduced. NVIDIA plans to replace thousands of copper cables inside its rack-mounted systems with Corning optical fiber, thereby ushering in an architectural transformation that brings light “into the cabinet and close to the chip.” Currently, six major tech giants—including AMD, Broadcom, and Microsoft—have jointly established the Optical Computing Interconnect Multi-Source Agreement Group to standardize AI optical interconnect specifications. Market research firm Yole forecasts that the CPO market will reach US$14.4 billion by 2031.

According to reports, the optical communications business has become Corning’s largest and fastest-growing segment. The company, renowned for manufacturing display glass, has supplied millions of miles of optical fiber since its 1970 invention of fiber optic cable for long-distance communication, connecting the racks of major AI data centers worldwide.

(Source: China Electronics News)