Descriptions:
Coherent CEO Jim Anderson joins Bloomberg Technology to discuss Nvidia’s $2 billion investment in the optical networking company, a deal that accelerates the transition from electrical to photonic data transmission inside AI data centers. Anderson explains that while a significant share of data center connections already run on optical links, the explosive growth in AI workloads is forcing a much broader conversion — electrical signals hit physics limits at high data rates, making photonics the only viable long-term path for interconnects.
The partnership builds on a 20-plus year relationship between Coherent and Nvidia, including through Nvidia’s Mellanox acquisition. The investment will fund capacity expansion: Coherent is doubling its indium phosphide production this year to meet demand from Nvidia and major hyperscalers, with key laser manufacturing happening in Sherman, Texas — a deliberate push for US-based supply chain capacity amid broader concerns about geographic concentration. Anderson notes demand forecasts from customers are ‘exceptionally strong’ and that supply is still falling meaningfully short.
Anderson outlines two compounding secular growth drivers: overall data center expansion driven by AI training and inference, and the structural copper-to-optical conversion wave affecting an increasing share of server and switch interconnects. The Nvidia capital injection is framed not as a speculative bet but as an accelerant for a transition that is already underway, with the investment giving Coherent the runway to ramp manufacturing faster than organic cash flow would allow.
📺 Source: Bloomberg Technology · Published March 03, 2026
🏷️ Format: Interview
