On September 17, B. Riley initiated coverage of Nokia Oyj (NYSE:NOK), giving the stock a Buy rating and setting the price target at $15. The firm pointed to the company's position in telecom infrastructure, cloud software, and hardware networking solutions.
Riley noted that the company's networking businesses are seeing strong growth. In Q2 2026, Optical Networks revenue increased 20% year-over-year, while IP Networks grew 16%. Net sales to AI and cloud customers also surged 105%. The research firm noted that hyperscalers continue to purchase Nokia Oyj's (NYSE:NOK) AI networking products to support large-scale computing clusters.
The company's AI and cloud opportunity is also reflected in its order book. Nokia Oyj (NYSE:NOK) reported EUR 2.8 billion in AI and cloud order intake during the second quarter of 2026. B. Riley pointed out that this provides revenue visibility into 2027. The firm also noted that the carrier inventory correction cycle that had weighed on global capital expenditures has now concluded.
Riley derived its $15 price target using a sum-of-the-parts valuation that separates the company's legacy ****** ets from its data center business. The firm applied a premium hardware multiple to the data center segment, reflecting its view of the potential operating leverage in that business.
Profitability Remains a Concern

#riley #NYSE #firm

Nokia stock surged 6% to $10.39 after its AI-RAN platform advanced to live field trials with eight global operators, delivering 20%+ spectral efficiency gains.
Ericsson's near-flat 0.7% move signals markets aren't pricing AI-RAN as a category-wide event, keeping today's rally a Nokia-specific story.
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Nokia (NYSE:NOK) stock is rising in early Wednesday trading, up 6% to $10.39 after the company said its artificial intelligence-powered radio access network (AI-RAN) platform is moving from evaluation to live field trials at eight global operators. The list spans North America, Europe, Asia-Pacific and the Middle East, and it reframes AI-RAN as a shared industry priority rather than a single-vendor pilot. That geographic reach is what today's move is paying up for.
The move is Nokia-specific. The iShares U.S. Technology ETF (NYSEARCA:IYW) is unchanged at $250.08, and the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is up 0.4% to $760.33. Nokia stock is climbing while U.S. technology sits still and the broad benchmark is only marginally higher, which frames today as a name-specific catalyst.

#trials

Nvidia's less famous telecom investment had more than doubled on paper by midyear. In October 2025, NVIDIA Corporation (NASDAQ:NVDA) agreed to invest $1 billion in Nokia at $6.01 per share. Nvidia's Q2 13F valued the stake at about $2.2 billion as of June 30. The marked gain is impressive, but the strategic prize is larger: Nokia Corporation (NYSE:NOK) and Nvidia are developing AI-RAN technology intended to carry artificial intelligence from data centers into mobile networks and eventually 6G.
NVIDIA Corporation (NASDAQ:NVDA) wants the network itself to become accelerated computing infrastructure. If radio access networks adopt software-defined, AI-enabled architectures, Nvidia can sell computing, networking, and software into a market beyond hyperscale data centers. The bull case is that inference moves closer to users and telecom operators use spare network capacity for AI workloads. The bear case is timing. Standards, carrier budgets, and commercial rollouts move slowly, making near-term revenue difficult to separate from long-term vision.
Nokia Corporation (NYSE:NOK) gains a strategic partner, capital, and access to an AI platform that can make its radio portfolio more competitive. A successful AI-RAN transition could improve product differentiation and create recurring software opportunities. Yet Nokia must balance that promise with operator spending cycles, intense competition, and the risk that open architectures reduce hardware pricing power. A valuable Nvidia stake does not by itself repair telecom margins.
The partnership is therefore an option on convergence. Nvidia supplies the compute ecosystem; Nokia supplies carrier relationships and radio expertise. Each fills a gap the other cannot quickly build. However, investors should not treat the June valuation as a realized return or ***** ume 6G revenue is imminent. The commercial value emerges only when operators deploy systems at scale and disclose credible returns with attractive economics across multiple markets.
Hedge-fund participation increased in both names. Nvidia ownership rose to 285 funds in the second quarter from 275, while Nokia ownership increased to 81 funds from 66. Fisher ***** et Management raised its Nvidia stake 3% to 90.9 million shares, and Marshall Wace increased its Nokia position 232% to 33 million shares. As of August 14, 43.2 million Nokia shares were sold short, only 0.75% of the float and 0.6 days of average trading volume. The low reported short-interest percentage shows limited reported short positioning, but it does not identify the holders or tell us why those positions exist. Nvidia's paper gain rewards the entry price; the real upside depends on AI-RAN becoming a commercial bridge to 6G.

#nokia #stake

Our ******* ysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here.
Europe's benchmark just swapped an old auto giant for an AI infrastructure comeback story. Nokia is back in the Euro Stoxx 50. Volkswagen is out. That says a lot about where investors think Europe's future growth is hiding.
Nokia will rejoin the Euro Stoxx 50 before the market opens on September 21, ending a one-year exile from the euro area's blue-chip stock benchmark.
The Finnish mobile network-equipment maker will enter alongside French utility Engie. Volkswagen and Dutch information-services group Wolters Kluwer will drop out.
The reshuffle is more than a quarterly paperwork exercise. Nokia shares have more than doubled over the past year as investors bought into the company's push into artificial intelligence and cloud infrastructure. The group has been shifting more attention toward fiber-optic equipment and network systems used by companies building AI data centers.

#nokia #volkswagen #investors #year

Nokia (NYSE:NOK) has spent the past year rebuilding its story around AI, and earlier on July 14, it added another data point. The company signed a 5G expansion agreement with Taiwan Mobile to deploy its AirScale portfolio and AI-driven software across the carrier's network, part of a broader push toward what Nokia calls AI-native mobile infrastructure. The deal lands alongside a wave of insider stock purchases and a deepening Nvidia partnership, all pointing toward the same bet: that AI traffic is about to overwhelm the networks carrying it, and Nokia wants to be the company that fixes that.
The Taiwan Mobile agreement is built around four distinct AI applications rather than a single upgrade. Nokia's AI for Network software, including its Predictive Hardware ****** ytics service and MantaRay SON self-organizing network tool, automates operations and enables closed-loop network ****** urance in real time. Separately, next-generation baseband and radio hardware increases capacity and uplink performance specifically to handle AI-driven traffic, while AI-powered energy management helps Taiwan Mobile hit its sustainability targets, and AI-enabled self-healing capabilities strengthen resilience during outages. Taken together, the deployment sets up support for 5G-Advanced features like network slicing and RedCap.
That kind of upgrade is becoming urgent rather than optional. Generative AI traffic is already driving more than twice as much uplink data as ordinary mobile use, according to Aetha Consulting, and total network load could grow by as much as 10x current levels. Nokia has been building toward this since last October, when it began developing sixth-generation RAN technology, and in June it launched the industry's first commercial AI-RAN platform, offering 20% higher spectral efficiency than existing systems. Management expects that figure to reach 50% next year and 100% by 2028. The 6G equipment market alone is projected to exceed $50 billion by the first half of the 2030s, growing more than 20% annually, a meaningful expansion opportunity for a company that generated roughly $23 billion in revenue last year.
Nokia is not building this alone. Nvidia Corporation (NASDAQ:NVDA) committed a $1 billion equity investment at $6.01 per share back in October 2025, and Nokia's AI-RAN base stations now run on Nvidia GPUs, with Grace CPU Superchips handling higher-layer processing in Cloud RAN deployments. T-Mobile (NASDAQ:TMUS) has agreed to trial the designs starting in 2026. Dell Technologies (NYSE:DELL) is involved too, supplying PowerEdge servers for the computing backbone, fresh off a quarter where its AI server business grew 757% year over year.

#nokia #taiwan

Investors old enough to remember the advent of mobile phones in the 1990s probably still think of Nokia (NYSE: NOK) as a phone manufacturer. It's not actually in the business anymore, however.
Some mobile phones still bear the Nokia name, but it's only licensed by mobile phone maker HMD; Nokia only makes some of the technological components found within modern-day mobile devices. Its big business these days is the networking and connectivity hardware required by cloud computing, mobile carriers like AT&T and Verizon Communications, and institutions.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
This business is about to get a whole lot bigger, too. Credit the growth of artificial intelligence (AI), mostly. Here's why and who wins.
If you weren't aware, the 5G connection your smartphone most likely utilizes is short for fifth-generation mobile broadband connectivity -- an upgrade from measurably slower previous-generation 4G technology. And it arrived just in time. Thanks to the explosion in artificial intelligence, end users are wirelessly sending and receiving more digital information than ever before. Industry expert Aetha Consulting reports that generative AI traffic alone is driving more than twice as much uplink (from user devices to the network) data traffic as ordinary mobile traffic does.

#nokia #flashing #phones

The AI buildout has resulted in an unanticipated casualty distant from Silicon Valley: telecom equipment manufacturers, who now compete with hyperscalers for the same memory chips. Three major companies, SK Hynix, Samsung, and Micron, control more than 95% of worldwide DRAM production, and as AI data centers use an increasing share of that output, memory chips used in telecom base stations become scarcer and more expensive as a direct result. That is the mechanism behind Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC)'s worst single-day stock reaction in nearly three years.
The company's shares plunged about 12% on July 14, reaching their lowest level since February, after Ericsson warned that growing component costs, particularly memory chips, will affect margins in the future. Looking into Ericsson's Q2 2026 results, the market's harsh reaction was more about forward guidance rather than a breakdown in existing operational execution. Adjusted EPS was SEK 1.22 (~$0.13), which was in line with market expectations. Adjusted gross margin increased to 48.4%, a two-percentage-point year-over-year rise after normalizing for a prior-period IPR licensing settlement. Meanwhile, reported net sales declined 6% to SEK 52.7 billion ($5.62 billion), missing the SEK 53.71 billion forecast, while organic sales excluding currency and one-offs remained essentially flat.
What worried investors was guidance and cash flow, not the print itself. Free cash flow before M&A fell to SEK 0.4 billion from SEK 2.6 billion a year ago, owing to increased inventories being accumulated ahead of scheduled third-quarter deliveries. Management forecasted Q3 Networks adjusted gross margin to a range of 48% to 50%, a slight decrease from Q2 levels, noting a higher share of lower-margin network rollout projects and component inflation developing "gradually" during the second half of 2026 and into 2027.
Jefferies, which rated the stock at a Hold with a target price of 98 Kronor, framed the sales miss as being centered primarily on delayed India deliveries within the Networks division as opposed to broad-based demand weakness, and noted Ericsson is forecasting a stronger-than-seasonal third quarter as those delayed deliveries arrive.
The sudden selloff has generated an attractive valuation gap for long-term investors. Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC) is currently trading at a 14.45x forward P/E multiple, representing a significant discount to key infrastructure rivals such as Nokia, which trade on similar 5G-cycle and edge-connectivity theses. The market's knee-jerk reaction appears to regard temporary component inflation as a permanent weakening of Ericsson's earnings potential, resulting in a clear disparity between price and underlying value.

#billion #adjusted #memory

Interested in Nokia Corporation? Here are five stocks we like better.
Nokia posted stronger Q2 2026 results, with 9% constant-currency net sales growth and improved margins. Network Infrastructure led the gain, while comparable operating profit rose to EUR 434 million and gross margin increased to 46%.
AI and cloud demand was a major growth driver, with sales from those customers more than doubling to EUR 446 million and order intake reaching EUR 2.8 billion. Management warned the orders were lumpy and that about half should convert to revenue within the next 12 months.
Nokia highlighted strategic investments in AI-RAN and optical capacity, including the launch of its first commercial AI-RAN platform and expansion of manufacturing in San Jose, Pennsylvania, and Arizona. The company also maintained its outlook, though it expects third-quarter mobile margins to dip before improving later in the year.
The New Nokia: A Bullish Upgrade Ignites This Big AI Bet

#Growth #million

Nokia (NYSE: NOK) used to make smartphones, but the stock's 130% rally over the past year has nothing to do with those consumer products. The company has become a major part of the AI build-out thanks to a new technology that most people don't know about: artificial intelligence radio access networks (AI-RAN).
AI-RAN helps tech giants break through the latency limitations of AI data centers and enables the creation of micro-data centers that scale real-time AI inference. This technology may soon become a hot topic with investors, just as memory chips have recently.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Nokia isn't posting impressive overall growth rates right now. It delivered only 4% year-over-year revenue growth in Q1, but its small AI and cloud segment grew by 49%. Demand for optical networking hardware to go into AI data centers has contributed to the stock's rally, but AI-RAN may be the golden opportunity moving forward.
In its most recent report, management highlighted that AI inference demand is growing faster than AI model training demand, and those workloads will require AI-RAN to operate more effectively in real-time scenarios.

Viavi Solutions Inc. (NASDAQ:VIAV) is one of the top stocks to buy according to Whale Rock Capital Management. On July 1, Susquehanna ***** yst Mehdi Hosseini raised his price target on Viavi Solutions Inc. (NASDAQ:VIAV) to $66 from $60, while maintaining his Positive rating on the stock.
The reason for the call, according to Hosseini, was that Susquehanna was updating its estimates to reflect a higher Field Instrument revenue contribution. Viavi's Field Instrument business is a product line within its Network and Service Enablement segment that supplies handheld and portable testing tools used by technicians to install, troubleshoot, and maintain fiber and network equipment in the field. Hosseini's team lifted its revenue estimates for this business because they now expect a stronger ramp in data center interconnect, or DCI, deployments at two of Viavi's major optical networking customers; that is Nokia and Ciena.
DCI refers to the high-capacity optical links that connect data centers to each other. The ***** ysts noted that demand for this technology has been surging as hyperscale cloud providers race to expand AI computing capacity. They added that Nokia and Ciena are both racing to supply next-generation coherent optical equipment for these DCI links, and that Nokia recently unveiled a new suite of pluggable optical transceivers specifically built for DCI.
As these vendors ramp production and deployment of their new DCI and scale-across optical gear, they generate more business for Viavi, the ***** ysts noted.
Viavi Solutions Inc. (NASDAQ:VIAV) is a network test, monitoring, and ***** urance company. It provides testing, monitoring, ***** urance, and security solutions for telecommunications, cloud, enterprise, military, aerospace, and critical infrastructure networks across the Americas, Asia-Pacific, Europe, the Middle East, and Africa.

Nokia Oyj (NYSE:NOK) is one of the best stocks to buy according to David Greenspan's Slate Path Capital. Slate Path Capital increased its stake in Nokia stock by 7% during Q1 2026, and so the stock accounts for 4.3% of the portfolio. Nokia shares have more than doubled over the past year, and ***** ysts see the shares rising more over the next 12 months.
According to a June 30 press release, Nokia Oyj (NYSE:NOK) has inked a multi-year deal with SAP and Microsoft to modernize its ERP landscape. As part of this deal, Nokia will migrate its ERP portfolio to SAP S/4HANA landscape using the RISE with SAP methodology. The portfolio will be hosted on Microsoft's Azure cloud platform.
With this ERP portfolio migration, Nokia stands to benefit from continuous access to innovation and embedded AI capabilities. The portfolio that Nokia is moving covers data, processes, applications, and operating models.
Since SAP will operate and manage Nokia's ERP environment in the cloud, Nokia will be able to concentrate on business outcomes rather than infrastructure management.
Nokia Oyj (NYSE:NOK) provides hardware and software products used to build and operate network infrastructure. Its technology underpins wireless networks, fiber optic systems, and data center connectivity around the world. This Finnish company has emerged as a global leader in connectivity for the AI era.

We just covered Avoid ******* eX and Buy These 11 Stocks Instead. Nokia (NYSE:NOK) ranks #5 (see Avoid ******* eX and Buy These 5 Stocks Instead).
Number of Hedge Fund Investors: 66
Redditors are saying Nokia (NYSE:NOK) should not be seen as an old-school telecom equipment company hanging on for dear life. It has transformed. Nokia is emerging as a serious player in AI infrastructure. That's the real story that Wall Street is still catching up on.
In Q1 2026, Nokia's AI and cloud sales jumped 49% year over year. This segment now accounts for about 8% of Nokia's (NYSE:NOK) total revenue. In just the first quarter, Nokia pulled in €1 billion in AI and cloud orders. Those are firm purchase orders with real delivery dates from real customers. The order backlog is so big that lead times are running 12 to 18 months. Demand is crushing what the company can supply right now.
But what exactly is Nokia (NYSE:NOK) making for AI? Here's what matters. Nokia makes optical networking equipment. When hyperscalers build massive data centers, they need to connect all those servers together with super-fast fiber optic cables. Nokia makes the equipment that puts data onto those cables and pulls it off. It's called coherent optical technology. This equipment lets data move really fast and really efficiently between data centers and inside data centers.

When I hear Nokia (NYSE: NOK), I think of the indestructible brick phone my parents owned. And I think about the 2021 meme-stock craze.
But over the past several years, Nokia has been rebuilding itself around three businesses: network infrastructure, optical networking, and enterprise technology. None of that is flashy. But something shifted this year that deserves more attention than it's getting.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
In May 2026, Nokia and Nvidia (NASDAQ: NVDA) announced a landmark strategic partnership in which Nvidia will invest $1 billion in Nokia -- at $6.01 per share -- to accelerate what the two companies are calling AI-RAN, a new category of radio access networks built natively for artificial intelligence (AI) workloads. Nvidia becomes a 2.9% shareholder in Nokia as part of the deal. T-Mobile (NASDAQ: TMUS) also signed on to run field trials of AI-RAN this year.
Think about what that structure implies. Nvidia doesn't write $1 billion checks to legacy companies. It bets on picks-and-shovels plays in markets it believes are about to explode. Nokia is now one of those picks.

Alphabet Inc. (NASDAQ:GOOG) is one of the top trending US stocks to buy now. Alphabet Inc. (NASDAQ:GOOG) announced on June 22 an expanded partnership between Google Cloud and Nokia, aimed at integrating Google's Gemini models into Nokia's network software suite, the Nokia ******* urance Center. Management stated that by developing six AI agents built with Gemini, which is the most capable family of multimodal models by Google, Nokia will advance its capacity to help telecommunication providers resolve network issues quickly, reduce operational costs, and step towards fully automated, self-driving operations.
In a separate development, Reuters reported on June 17 that Britain's competition watchdog ‌has ordered Alphabet Inc.'s (NASDAQ:GOOG) Google to provide greater transparency on the workings of its search ranking, which is a part of the new rules that aim to secure a "fairer deal" for businesses and address the concerns ******* ociated with the company's dominance in the sector. It further reported that according to the Competition and Markets Authority's statement on Wednesday, Google's organic search results must be ranked using objective criteria, along with the introduction of clearer complaint processes, increased transparency over ranking, and allowing the transfer of their search data to authorized third parties.
Alphabet Inc. (NASDAQ:GOOG) is a holding company with segments including Google Services, Google Cloud, and Other Bets. The Google Services segment operates various services and products, including Android, Google Maps, Google Play, Chrome, Search, and YouTube.
While we acknowledge the potential of GOOG as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
READ NEXT: 15 Stocks That Will Make You Rich in 10 Years AND 12 Best Stocks That Will Always Grow.

Alphabet Inc. (NASDAQ:GOOG) is one of the best trending AI stocks to watch in 2026. Alphabet Inc. (NASDAQ:GOOG) reported on June 22 that Google DeepMind and A24 are announcing a first-of-its-kind partnership focused on research, which pairs "a world-leading research lab with the industry's most filmmaker-forward studio to help artists develop new workflows and techniques". The collaboration ensures that the "tools of the future are shaped by the creators who use them", and creates a deep research and development collaboration between A24 and Google DeepMind spanning multiple projects over time. Management further stated that the hands-on collaboration offers Google DeepMind invaluable feedback and guidance from leading artists.
The same day, Alphabet Inc. (NASDAQ:GOOG) also announced an expanded partnership between Google Cloud and Nokia, aimed at integrating Google's Gemini models into Nokia's network software suite, the Nokia ****** urance Center. Management stated that by developing six AI agents built with Gemini, which is the most capable family of multimodal models by Google, Nokia will advance its capacity to help telecommunication providers resolve network issues quickly, reduce operational costs, and step towards fully automated, self-driving operations.
Alphabet Inc. (NASDAQ:GOOG) is a holding company with segments including Google Services, Google Cloud, and Other Bets. The Google Services segment operates various services and products, including Android, Google Maps, Google Play, Chrome, Search, and YouTube.
While we acknowledge the potential of GOOG as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
READ NEXT: 15 Stocks That Will Make You Rich in 10 Years AND 12 Best Stocks That Will Always Grow.

Alphabet Inc. (NASDAQ:GOOG) is one of the safe stocks for beginners to buy in 2026. Alphabet Inc. (NASDAQ:GOOG) announced on June 24 that computer use is now a built-in tool that is supported in Gemini 3.5 Flash, delivering its best performance yet for agentic computer use tasks. Computer use was previously only available as a standalone Gemini 2.5 computer use model, but is now integrated natively in the main Gemini Flash model. Management further stated that with built-in computer use capability, 3.5 Flash can now be used by developers to reliably build custom agents capable of reasoning, seeing, and taking action across mobile, browser, and desktop environments.
In a separate development, Alphabet Inc. (NASDAQ:GOOG) announced on June 22 an expanded partnership between Google Cloud and Nokia, aimed at integrating Google's Gemini models into Nokia's network software suite, the Nokia ***** urance Center. Management stated that by developing six AI agents built with Gemini, which is the most capable family of multimodal models by Google, Nokia will advance its capacity to help telecommunication providers resolve network issues quickly, reduce operational costs, and step towards fully automated, self-driving operations.
Alphabet Inc. (NASDAQ:GOOG) is a holding company with segments including Google Services, Google Cloud, and Other Bets. The Google Services segment operates various services and products, including Android, Google Maps, Google Play, Chrome, Search, and YouTube.
While we acknowledge the potential of GOOG as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
READ NEXT: 15 Stocks That Will Make You Rich in 10 Years AND 12 Best Stocks That Will Always Grow.

As President Donald Trump stood on a podium in Pennsylvania's Lehigh Valley, he went apparently off script to name check a pair of companies (1). Pharmaceutical giant Eli Lilly, which he called "a great company," was touted for investing $3.5 billion in a manufacturing facility. And Nokia, he said, was investing $30 million to expand its semiconductor packaging and testing facility.
The companies got the shout-outs for bringing jobs to the state and for their investments in American facilities. But when Trump talks positively about publicly traded companies, skeptics start probing deeper.
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As graphics processing unit (GPU) clusters grow larger and more power-hungry, electrical connections are reaching their limits when it comes to speed, heat, and energy use. In separate announcements, both Goldman Sachs and Nokia (NYSE: NOK) recently flagged photonics as the next critical layer in artificial intelligence (AI) infrastructure. Optical networking, which uses light to move data, offers an alternative path forward.
Let's ****** yze this enormous commercial opportunity and explore what it could mean for Nokia as the Finnish company quietly transitions from yesterday's leader of mobile devices to an AI networking powerhouse.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Photonics is the process of generating, controlling, and detecting light (photons) to transmit information. In AI data centers, silicon photonics takes this process a step further by integrating lasers, modulators, and detectors directly onto chips using existing semiconductor manufacturing lines. This integration can deliver measurable advantages over traditional electrical wiring, including higher bandwidth, lower latency, and reduced power consumption.
As AI training demands ever-larger clusters of GPUs, electrical signals are struggling to keep up without excessive heat and energy waste. Photonics solves this by enabling dense, energy-efficient optical links between chips and racks. This is essential, as compute power is no longer the main constraint of AI development -- connectivity is. Without scalable optical solutions, the next generation of AI applications will be limited by underlying infrastructure rather than silicon's capacity capabilities.