Nvidia Just Dropped $4 Billion on Two Companies You've Never Heard Of - And It Could Change How Fast AI Gets

Nvidia, the company that basically prints money selling AI chips, just made a massive bet that could change how computers think: they are investing $2 billion each in two companies called Lumentum and Coherent.

Never heard of them? Most people have not. But here is why this matters to you.

Right now, the chips inside AI data centers send information using electrical signals through tiny copper wires. It works, but it is hitting a wall. The data is moving so fast and in such huge amounts that electricity simply cannot keep up. It is like trying to push a fire hose's worth of water through a garden hose.

Lumentum and Coherent specialize in photonics, which is a fancy word for using light instead of electricity to move data. Light is faster, uses less energy, and does not generate as much heat. By building light-based connections into their AI chips, Nvidia could make their already dominant processors dramatically faster.

This $4 billion bet signals that Nvidia sees photonics as the next big leap in AI hardware. And when the company that controls over 80% of the AI chip market makes a move this big, the entire industry tends to follow.

For everyday people, this could mean AI tools like ChatGPT and image generators getting noticeably faster and cheaper to run in the coming years.

As reported by Reuters.

Source: Reuters