Nvidia is joining hands with glass and optical fiber corporations Corning to tackle artificial intelligence (AI) data bottlenecks by starting a transition to replace copper cables with optical fiber.
Nvidia and Corning said on the 6th (local time) that they entered into a multiyear commercial and technology partnership to supply solutions, including advanced optical fiber, needed to run next-generation AI infrastructure.
Under the deal, Corning plans to increase its U.S. production capacity for optical connectivity devices tenfold and expand its optical fiber production capacity by 50%.
It will also build three advanced manufacturing facilities in North Carolina and Texas and create 3,000 new high-paying jobs.
CNBC reported that through the deal, Nvidia obtained the right to invest up to $3.2 billion (about 4.6 trillion won) in Corning.
Specifically, Nvidia secured warrants to buy 15 million shares of Corning at $180. Another $500 million was paid upfront separately. Expansion of Corning's manufacturing facilities will also be financed with this investment.
Nvidia is expanding its collaboration with Corning because copper cables have reached their limits in the push to maximize the efficiency of AI data centers.
Nvidia plans to move in earnest to adopt "co-packaged optics," replacing about 5,000 copper cables in the next-generation AI rack "Vera Rubin" with Corning's optical fiber. Optical fiber not only transmits far faster than copper cables but also uses 5 to 20 times less power.
Jensen Huang, Nvidia chief executive officer (CEO), said, "AI is driving the largest infrastructure buildout of our time, and this is a once-in-a-lifetime opportunity to reinvigorate U.S. manufacturing and supply chains," adding, "We are laying the foundation for AI infrastructure where intelligence moves at the speed of light, while carrying forward the 'Made in America' tradition," explaining the technical significance of the collaboration.
After news of the deal with Nvidia became known, Corning's share price surged, closing at $181.57 in regular trading, up 12% from the previous close.