Optical modules convert electrical signals into light to move data quickly and reliably in AI systems, enabling fast and smooth data processing. Although co-packaged optics (CPO) and on-board optics (OBO) have been proposed to increase bandwidth density, these approaches introduce significant challenges in field serviceability, scalability, and manufacturability, making them difficult to deploy widely in hyperscale environments. Understanding their role is key to building efficient, scalable AI systems. Yole Group attended OFC 2026 with a dedicated team of analysts on site, actively engaging with major players in the photonics. The widespread adoption of AI large-scale models, represented by ChatGPT, will drive a rapid increase in computational power demand. In this process, the server industry chain will become a crucial beneficiary.
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