On March 18, Nvidia had its annual developer conference at a packed hockey stadium in San Jose California. Several announcements were made regarding upcoming chips, including Nvidia optical chip, which will assist in cutting energy usage. Nvidia’s CEO Jensen Huang said at an annual developer conference, “A promising new chip technology designed to reduce energy consumption isn’t quite reliable enough for Nvidia’s top-tier graphics processing units (GPUs) yet.”
Huang has confirmed that power-saving optical chips need more time to be used vastly. The new technology, called co-packaged optics, uses laser beams to send data over fiber optic cables between chips, offering faster connections and better energy efficiency than traditional copper cables.
Nvidia Delays Optical Chip Technology
At Nvidia’s annual developer conference in San Jose, California, Huang revealed that the company will integrate co-packaged optical technology into two new networking chips designed for server switches, marking a significant leap forward in chip innovation. These chips will be 3.5 times more energy efficient than the previous ones. The new chips are expected to launch later this year and into 2026, marking an important step forward for the technology.
Silicon Valley entrepreneurs and investors are excited about optics technology, believing it will be key to building bigger computers for AI systems. Huang mentioned that even with advancements from companies like DeepSeek, AI will still need more computing power to process answers.
Nvidia Sticks to Copper for Now
After his speech, Huang told journalists that while Nvidia explored using optical connections more broadly in its flagship GPUs, it had no plans to do so. He explained that traditional copper connections were far more reliable than today’s optical ones. “It’s not worth it,” Huang said about using optical connections directly between GPUs. “We keep experimenting with the idea, but copper is much better.”
He emphasized that Nvidia’s focus was on providing a dependable product roadmap for its customers, like OpenAI and Oracle. “In a few years, hundreds of billions of dollars will be spent on AI infrastructure,” Huang said. “You’ve got the budget, the power, the land—what are you ready to scale up to right now?”
Nvidia Stock Faces Negative Investor Reaction
On Tuesday, Nvidia announced its new generation of AI chips during the annual developer conference. However, Nvidia’s stock dipped by 3% following the chip’s announcement, which was expected to be a boost for the share market. Investors kept selling tech stocks due to economic uncertainties tied to Trump’s tariffs. Stocks from other companies in the Magnificent Seven also ended lower. Nvidia’s stock dropped 15% this year, hurt by global risk concerns and the release of Chinese DeepSeek’s cheaper AI model.
