Connectivity Revolution or Evolution Inside Data Centers?

The rapid advancement of artificial intelligence (AI) is fundamentally reshaping the role of connectivity within data centers, pushing the intra-data center network to become as critical as the comput... Read original →

The AI compute arms race is pushing intra-data center interconnects to a technological inflection point. Nokia’s bet on LRO and XPO represents a strategic hedge against the high integration risks of CPO—preserving pluggable ecosystems avoids costly retooling, whereas CPO demands entirely new packaging and test infrastructures with yield uncertainties. Upstream photonic IC suppliers (e.g., Taiwan, China’s Innolume) face a silicon photonics vs. InP crossroads, while hyperscalers exploit the transition to offload 800G-to-1.6T inventory risk onto module makers. Geopolitically, U.S. export controls on advanced packaging tools have inadvertently raised barriers for NPO/CPO adoption, giving European players like Nokia breathing room through localized manufacturing. Within 18 months, only vendors with co-design capabilities tightly coupled to leading AI accelerator firms will survive; others risk commoditization as contract manufacturers.