Nvidia Corp has bought US$500 million worth of rights for shares in fiber-optic cable maker Corning Inc as part of a broader partnership between the two companies aimed at expanding artificial intelligence (AI) infrastructure.
Nvidia is receiving as many as 3 million shares at US$0.0001 each and can buy as many as 15 million shares at an exercise price of US$180 in the deal, a regulatory filing on Wednesday showed.
Corning in turn pledged to increase US fiber production capacity by more than 50 percent to supply more optical fiber for AI data centers.
Photo: Michael Nagle, Bloomberg
Such sites rely on the cables to carry data at high speeds between equipment, including Nvidia’s chips.
Nvidia has struck billions of dollars’ worth of deals across the AI ecosystem, taking stakes in everything from developers such as OpenAI to other chipmakers such as Marvell Technology Inc, in an effort to fuel industry-wide growth. Earlier this year, Nvidia invested a total of US$4 billion in Lumentum Holdings Inc and Coherent Corp, two companies that develop optics equipment.
Shares of Corning, also known for supplying glass for Apple iPhones, soared as much as 21 percent on the news on Wednesday, marking the firm’s biggest intraday gain since 2002. Nvidia shares gained as well, rising 5 percent.
Fiber-optic connections are increasingly seen as a vital part of AI computing infrastructure. Traditional copper wire links between components are reaching the limit of their capabilities, making it harder to handle the massive amount of data generated by AI.
Newer generations of chips are designed to take advantage of the greater transmission speed offered by fiber, which uses photons traveling at the speed of light to send information.
Nvidia CEO Jensen Huang (黃仁勳) stressed in a statement how the partnership with Corning would benefit the US economy.
The AI boom presents an opportunity to “reinvigorate American manufacturing and supply chains,” Huang said.
Corning said that its manufacturing expansion would include the construction of three new complexes in North Carolina and Texas.
The projects are estimated to create more than 3,000 new US jobs, the company said.
Corning separately projected that it would reach a US$20 billion annualized sales run rate by the end of this year and is targeting a US$30 billion run rate by the end of 2028.
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