Optical networks become critical infrastructure for AI

The rapid rise of artificial intelligence is driving a structural shift in data center infrastructure, moving from traditional copper cabling to optical networks. As AI models require tens of thousands of graphics chips to exchange massive amounts of data continuously, copper cables are reaching physical limits due to excessive heat loss and energy inefficiency.

To address these bottlenecks, the industry is increasingly adopting optical data transmission via fiber optics. This technology uses light pulses to transfer data, enabling faster and more energy-efficient communication essential for cloud infrastructure and modern AI applications.

According to market observer TrendForce, the adoption of optical transceivers with transmission rates of 800 Gigabits per second is expected to grow significantly. The market share for these modules, which connect servers and switches, is projected to rise from 19.5 percent in 2024 to over 60 percent by 2026.