NVIDIA will invest US$2 billion (A$2.8 billion) each in photonics and optical technology manufacturers Lumentum Holdings and Coherent Corp under multi-year strategic agreements.
The share prices of the two companies surged to record highs in response to the announcements.
The computer chip giant said the agreements included multi-billion dollar purchase commitments and future capacity access rights for advanced laser components and, in the case of Coherent, optical networking products.
NVIDIA said it was investing $2 billion in each company to support research and development, future capacity and operations as the companies build out their United States based manufacturing capabilities.
“AI (artificial intelligence) has reinvented computing and is driving the largest computing infrastructure buildout in history,” NVIDIA founder and Chief Executive Officer Jensen Huang said in a news release.
He said NVIDIA and Lumentum were advancing the world’s most sophisticated silicon photonics to build the next generation of gigawatt-scale AI factories.
NVIDIA and Coherent were pioneering next-generation silicon photonics to enable AI infrastructure at unprecedented scale, speed and energy efficiency.
The investments and agreements represent a significant strategic shift by the world’s most valuable company, signalling its interest in using light to transmit data and thereby overcome the bottlenecks of traditional copper-based computing.
Lumentum CEO Michael Hurlston said his company was investing in a new fabrication facility to increase capacity and accelerate innovation.
“We’re excited to work together to expand what’s possible for the AI optical architectures of tomorrow,” he said.
Coherent CEO Jim Anderson said the company was proud to expand its 20-year relationship with NVIDIA by increasing access to include multiple product families to help build the AI data centres of the future.
“This strategic relationship underscores Coherent’s role as a key enabler of next-generation AI data centre infrastructure,” he said.
Lumentum (NASDAQ: LITE) shares closed $82.34 (11.75%) higher at $783.25, capitalising the company at $55.92 billion, after touching a record peak of $783.80.
Coherent (NYSE: COHR) shares ended up $39.98 (15.44%) at $298.91, giving it a market capitalisation of $56.04 billion, after reaching a new high of $299.09.
Nvidia (NASDAQ: NVDA ) shares climbed $5.18 (2.93%) to $182.37, implying a market value of $4.43 trillion.
