Tom's Hardware reports the AI data center optical interconnect market will hit $144 billion by 2030, a ten-fold jump from 2024. Silicon photonics will capture nearly two-thirds of that revenue, propelled by co-packaged optics.
Key facts
- $144B projected AI optical interconnect market by 2030
- Ten-fold increase from 2024 baseline figures
- Silicon photonics to capture nearly two-thirds of revenue
- Co-packaged optics named as primary demand driver
- Market rivals GPU spending at projected scale
The AI data center optical interconnect market is projected to reach $144 billion by 2030, a ten-fold increase from 2024 figures, according to @tomshardware. Silicon photonics will account for nearly two-thirds of that revenue, with co-packaged optics named as the primary demand driver.
The shift marks a structural change in how AI clusters are wired. Traditional pluggable transceivers — the workhorse of Ethernet and InfiniBand fabrics — are hitting power and density walls as clusters scale past 100,000 GPUs. Co-packaged optics, which place optical engines directly on the switch or GPU package, cut electrical trace lengths and slash per-bit energy. The $144 billion figure implies the market roughly triples its current compound growth rate, a projection that assumes hyperscalers commit to CPO in volume before 2028.
Co-packaged optics are named as the primary driver behind the silicon photonics surge. The technology has been in development for years — Broadcom, Intel, and TSMC have all demonstrated CPO prototypes — but volume adoption has lagged due to manufacturing yields and thermal management challenges. The new projection suggests those hurdles clear in the next 24 months.
The forecast does not break down revenue by vendor, and Tom's Hardware does not name the research firm behind the numbers. The ten-fold growth rate is aggressive; for comparison, the overall optical transceiver market grew roughly 15% annually through 2024. A 2030 figure of $144 billion would make optical interconnects one of the largest single line items in AI infrastructure, rivaling GPU spending.
What matters operationally: CPO changes the server bill of materials. If silicon photonics takes two-thirds of a $144 billion market, that's roughly $95 billion flowing to photonic component makers, packaging houses, and laser suppliers. Companies like Broadcom, Marvell, and Cisco are positioned to capture that spend, but the shift also threatens incumbent pluggable transceiver vendors like Coherent and Lumentum, whose products become obsolete in CPO-dominant designs.
What to watch
Watch for hyperscaler CPO deployment announcements in 2026, particularly Nvidia's NVLink and Broadcom's Tomahawk 6 switch shipments. If either vendor discloses CPO-based systems in volume production, the $144 billion projection becomes credible; if not, the ten-fold growth rate will likely be revised downward.
