Photonics: the new oil of data centers

The great AI factories are no longer marketing metaphors. We now speak of data centers with 100,000 GPUs and more, interconnected in tight clusters where every millisecond lost costs billions of poorly trained parameters. The bottleneck is no longer just compute, but rather the movement of information. Copper, which carried the internet of the past twenty years, is simply reaching the limits of what physics allows at reasonable cost.

When copper cables hit the wall

At very high throughput, electrical lines suffer resistive losses, skin effect, and a growing need for equalization and repeaters. Holding 100 to 400 Gb/s over a few meters becomes energy-expensive, even as per-link demand heads toward the terabit. Photonics (the science of the photon), meaning the use of light in optical circuits and components, offers a direct answer to this impasse: more bandwidth, far less energy per bit (as explained here), and a connection density no purely electronic architecture can match.

Work on silicon photonics shows that lasers, modulators, and photodiodes are now integrated in CMOS-compatible processes, with an explicit goal: cut data center network energy by an order of magnitude while multiplying link capacity. Academic demos already show over 1 Tb/s per fiber, and over 2 Tb/s of bandwidth per millimeter of chip shoreline. The trajectory is clear: to move from today's data centers to tomorrow's AI factories, we must shift massively to optics.

The photonic revolution is playing out on three levels

First, closest to compute, inside the server and rack, with integrated photonics and co-packaged optics. Instead of a switch ASIC connected by 64 electrical lanes to front-panel optical modules, you literally place a photonic matrix next to the switch chip. Electrical signals travel only a few millimeters before being converted into light. Result: fewer losses, more fibers, chassis that scale in capacity without an explosion in power draw and heat.

Then between racks, inside the data center, where photonics is shifting links from traditional IMDD (PAM4) to coherent, with denser modulation formats (QPSK, 16QAM) and tight WDM. A coherent link improves sensitivity by a good ten decibels, allowing either longer reach or lower transmit optical power. For cloud operators, that is a double dividend: optimized capex and reduced energy opex.

Finally, between data centers, on DCI interconnects, photonics already reaches tens of terabits per fiber, and the roadmap stretches further. Pluggable 400G-800G coherent optics are replacing costly discrete transponders, simplifying operations and enabling ever denser long-haul and subsea network architectures.

Photonics does not just replace cables with fiber; it reshapes data center network topology (co-packaged optics, optical switches, reconfigurable architectures) and becomes a central value lever, both in capex (fewer devices for more capacity) and in opex (less energy, less cooling).

To go further, discover our analysis of Lumentum Holdings, a leading player in this sector.