Optical Circuit Switching Market Will Hit $11 Billion
Data centers will adopt fiber-optic switching at scale to support AI training workloads by 2030.
Updated on Sept. 28, 2026 in Data Centers
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Citi projects the market for optical circuit switching will expand to $11 billion by 2030 as artificial intelligence data centers drive demand for new infrastructure. This forecast indicates that major hardware providers like Nvidia will soon join Google as primary customers for this technology.
Why it matters
The rise of artificial intelligence infrastructure is creating a shift toward optical circuit switching, which acts as a programmable switchboard for fiber cables in large-scale data centers. This technology is becoming essential for managing the high-bandwidth connectivity requirements of modern AI training clusters.
Optical circuit switching provides a programmable method to manage fiber connections within data centers. The projected $11 billion market size represents the expected capital deployment required to scale these switching boards against existing electrical switching limitations.
The players
Nvidia
A designer of graphics processing units and high-performance computing hardware that has seen a 20 percent stock increase in 2026.
An operator of global hyperscale data centers currently utilizing optical circuit switching technologies.
Lumentum
A developer of optical networking components and photonics technology for high-speed data communications.
Coherent
A provider of materials, networking, and laser technology essential for fiber-optic data infrastructure.
Citi
A multinational financial services institution providing market analysis and growth projections for the data center sector.
The details
Optical circuit switching functions as a programmable switchboard for fiber cables, allowing data centers to physically redirect light paths between servers without converting signals to electricity. By removing the need for optical-electrical-optical conversion, this method reduces latency and energy consumption at the hardware level. This shift enables higher connectivity density for the specialized processors used in AI training environments.
Timeline
Nvidia stock experienced a 20 percent gain during 2026.
The optical circuit switching market is projected to reach $11 billion by 2030.
The Tech Race
The transition to optical circuit switching marks a competitive shift for data center operators aiming to bypass electrical switching bottlenecks. This trajectory aligns with the infrastructure needs identified by Citi to support the next generation of AI compute clusters.
As data centers integrate this technology, the primary beneficiaries will be organizations scaling large-scale artificial intelligence models that require low-latency connectivity. While specific deployment dates for hardware providers remain unannounced, the 2030 market target suggests a multi-year transition for existing server infrastructure.
The takeaway
The move toward optical switching is becoming a critical metric for infrastructure efficiency in the AI era. Readers should monitor the supply chain commitments of Lumentum and Coherent as a leading indicator of large-scale adoption.
Further reading
For more on infrastructure trends, see the Data Centers section.
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