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Nvidia and Corning are pairing up on a huge announcement today that could totally flip the script for the AI buildout. Corning is building three new factories entirely devoted to products for Nvidia in North Carolina and Texas. And while Corning and Nvidia didn't share many specifics, it's likely the deal is worth tens of billions of dollars. This could be the big deal many analysts have been waiting for the debut of a new technology called co-packaged optics. It could eventually mean Nvidia replaces the 5000 copper cables, two miles worth, inside its rack-scale systems like Vera Rubin, with tiny glass fibers made by Corning, something that, until now, has never been accomplished at scale.
Co-packaged optics would vastly reduce the energy needs of an AI data center, because glass is far more energy efficient than copper. It also means lower latency for all those AI tasks, because fiber optics can send data far faster than copper, allowing faster communication between the hundreds of thousands of GPUs in an AI data center that need to act as one to execute AI workloads. Unlike traditional copper phone lines that transmit information as electrical signals. Fiber optic cables are tiny, bendable strands of glass where data is sent through as photons, lasers emitting pulses of light at far higher speed using less energy.
Moving photons is between 5 and 20 times lower power usage than moving electrons. So basically, as power becomes a bigger and bigger issue, fiber inevitably gets closer and closer to the compute. Founded in the Gold Rush era, Corning is turning 175 this week and is known for reinventing itself time and time again to stay ahead of crucial technologies. From the glass for Edison's light bulbs to Pyrex cookware, television screens to vials for Covid vaccines and, most famously, all the glass for iPhones. Now in the AI boom, Corning is supplying millions of miles of fiber optic cable to new data centers from all the major players already - Meta, OpenAI, AWS, Microsoft,
Google and CEO Wendell Weeks helped invent an entirely new, denser, thinner, fiber optimized for AI workloads. We got an exclusive look at it inside the world's largest fiber factory in January, where Meta is helping with a major expansion after committing up to $6 billion for Corning's fiber. Corning's largest and fastest growing business is optical communications. And with the Nvidia deal signaling a big move toward replacing copper with glass within its servers, demand is going to soar even higher today. In a server, you probably have about two and a half miles of copper in them. And ultimately, as these AI nodes start to have more and more GPUs in them, we start to, we're like sub 100 now, which you start to go up to hundreds, the distances will
climb, and when those distances climb, fiber optics become much more economical and much more power efficient.
