Core Insights - The article discusses the escalating arms race in artificial intelligence (AI) computing capabilities, highlighting a significant wave of global infrastructure investment. However, the AI industry faces a fundamental barrier in data movement between processors due to the limitations of existing copper interconnect technologies, which cannot effectively scale to meet the demands of next-generation AI requiring millions of processors. In this context, photonic chip startups Celestial AI and OpenLight are emerging to provide faster and more energy-efficient solutions to meet the needs of hyperscaler clients like Amazon, Microsoft, and Google [1]. Group 1: Celestial AI Developments - Celestial AI has secured $255 million in investments from TSMC's VentureTech Alliance and Samsung's Catalyst Fund, bringing its total funding to $520 million. The company plans to use this funding to strengthen its supply chain and deepen partnerships with foundries, including TSMC [2]. - Celestial AI expects to begin selling its first chips by mid to late 2026, focusing on server "scale-up" networks that account for 85% of data center traffic. The company anticipates that its scale-up sales will surpass copper-based Ethernet scale-out switches starting in 2025 [5]. - The core technology of Celestial AI, Photonic Fabric, offers optical interconnects from chip-to-chip and server-to-server, significantly outperforming Nvidia's NVLink in terms of power consumption. Celestial AI is positioning its Optical Memory Interface Bridge (OMIB) as an alternative to NVLink [5][7]. Group 2: OpenLight Developments - OpenLight raised $34 million in funding from investors including Juniper Networks and Lam Research. The company plans to use this capital to expand its process design kit (PDK) for active and passive photonic components, with production expected to begin for its first customers by the end of 2025 [4][11]. - OpenLight's competitive advantage lies in its use of indium phosphide technology, which allows for the integration of lasers onto chips. The company has demonstrated a 400 Gbps modulator with low power consumption of approximately 1.5 microjoules per bit [11]. - OpenLight provides a library of components (PDK) to enable customers to design their own chips, collaborating with ASE Holdings' subsidiary, Siliconware Precision Industries [14]. Group 3: Competitive Landscape - The photonic chip sector is becoming increasingly competitive, with players like Ayar Labs, Lightmatter, and Huawei entering the market. Huawei aims to challenge Nvidia's NVLink market with its new SuperPod cluster, which plans to connect up to 15,488 Ascend NPUs by 2026 [15]. - Lightmatter announced the Passage M1000 platform, which offers a total optical bandwidth of 114 Tbps, and is collaborating with GlobalFoundries and Amkor to begin production based on this platform [17][18]. - Quantum computing startup PsiQuantum is also manufacturing photonic chips using standard 45nm silicon nitride processes at GlobalFoundries [21].