Nvidia Sees The Light On Silicon Photonics And Maybe Optical Switching

By
virtue of its
$6.9 billion acquisition of Mellanox Technologies completed in early 2020, Nvidia
became a seller of optical transceivers for Ethernet and InfiniBand, but seven
years before that deal was done, Mellanox had acquired optical technology
suppliers Kotura and IPtronics to become a supplier of these components itself,
correctly perceiving how important optics would be for the future.

But,
when
it got into a spat with activist investor Starboard Value when the
networking company refused the advances of Marvell to acquire it in 2017, its optical
transceiver dreams were dashed, the business was slashed, and Mellanox began
sourcing lasers, photonic integrated circuits (PICs), and other components from
Lumentum, the company that would become Coherent, and others to build up its
LinkX cable and transceiver business. These cables and transceivers can account
for half of the cost of the network and well more than half of its power draw, so
to say LinkX is important to Mellanox and now to Nvidia is a big
understatement.

But
the challenges of designing more advanced AI systems are so severe, and the
need to eventually replace electrical circuits with optical ones are so acute,
that Nvidia is shelling out $2 billion a pop to both Lumentum and Coherent to
get their research and development moving in directions that are helpful to Big
Green’s AI ambitions.

The
investments in these two companies is not, like so many deals we see these days,
Nvidia buying…