Everyone's talking about AI. |
But almost no one is talking about the one thing that will determine who wins the AI arms race: |
How fast can the machines talk to each other? |
In this new era of hyperscale AI, where trillions of calculations are run in parallel across thousands of GPUs, the real bottleneck isn't chips. |
It's connection. |
And not just bandwidth or latency… |
But how efficiently and securely you can move massive amounts of data in real-time between processors, racks, and entire data centers. |
And the answer to that challenge doesn't lie in copper or silicon. |
It lies in light. |
Why the Future Will Run on Photons |
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The backbone of the digital world has always been wires. Electrical currents. Copper cables. Ethernet ports. |
But as the world shifts from text and images to full-blown intelligent computation—autonomous cars, AI-generated video, real-time simulations, smart cities—the old architecture simply can't keep up. |
Electrical interconnects, especially over long distances, suffer from heat loss, signal degradation, and bandwidth ceilings. |
That's why the biggest names in tech are racing to replace electrons with photons. |
Optical interconnects, which transmit data via pulses of light instead of electricity, offer: |
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In simple terms: They're faster, cooler, and infinitely more scalable. |
The Real AI Bottleneck |
AI doesn't just run on GPUs. |
It runs on clusters of GPUs connected in dense, complex webs. |
Every prompt you issue to ChatGPT, every image Midjourney creates, and every token Anthropic or Mistral generates in real time require coordinated computation across many chips. |
But to scale this coordination, you need light-speed communication. |
NVIDIA's latest DGX systems now incorporate optical links between GPUs. Why? Because traditional copper-based networks are already maxed out. |
Broadcom estimates that data-center networking costs, which used to be 5%–10% of total capex, could reach 15%–20% by 2030 as AI demand grows. |
And a significant driver of that cost is interconnect. |
If data movement becomes the bottleneck, your $10B compute cluster turns into an inefficient, heat-choked traffic jam. |
This is why optical is the future. |
And it's already happening. |
The Shift Has Begun |
Across the industry, optical interconnects are moving from niche applications to mainstream infrastructure: |
NVIDIA has introduced co-packaged optical switches to power next-gen AI networks, enabling ultra-fast data flow between GPUs at hyperscale. |
Broadcom and Marvell are developing advanced photonic DSP chips designed to enable up to 1.6 Tbps data throughput per optical module, accelerating AI data center interconnects. |
TSMC is producing optical engines capable of 12.8 Tbps within a few years. |
Ciena, known for long-haul fiber, is now linking AI clusters within campuses and between buildings. |
Startups like Ayar Labs and Lightmatter are deploying chiplet-based optical modules that reduce latency 10x and power usage up to 20x. |
A recent IEEE study found that optical interconnects use 1–2 picojoules per bit, compared to 10–20 pJ/bit for electrical. |
At hyperscale, that's billions in energy savings and lower cooling costs. |
The conclusion is clear: the companies that scale optical infrastructure fastest will own the AI frontier. |
From the Battlefield to the Datacenter |
Here's where it gets even more interesting. |
The U.S. Department of Defense is now prioritizing optical networking in battlefield communications, drone swarms, and satellite relays. |
In other words, light-speed coordination is a national security imperative. |
DARPA is funding efforts to bring silicon photonics to tactical and space applications, ensuring autonomous systems can coordinate without delay or degradation. |
This mirrors what's happening in commercial AI: whoever can coordinate the fastest wins. |
And that's why the investment theme here is not just about semiconductors. |
It's about infrastructure dominance. |
Just as railroads defined economic power in the 19th century… |
And oil pipelines defined it in the 20th… |
The 21st century will be defined by data infrastructure that moves at the speed of light. |
Optical interconnects are the next great network. |
They're the buried rail lines of the AI era. The undersea cables of the cognitive age. The fiber-optic nervous system of civilization. |
And very few investors are paying attention. |
But the big players are. |
Amazon is buying custom optical chips. |
Microsoft is partnering with Lumen and Corning to expand fiber infrastructure to meet AI demands. |
Apple and Meta are developing in-house photonics teams to reduce reliance on traditional suppliers. |
But the market hasn't caught up… yet. |
Wall Street still thinks in categories: "chips," "cloud," "telecom." |
But optical interconnects sit between categories: |
They're chips, but they're not semiconductors. |
They're infrastructure, but not regulated utilities. |
They're communications, but not traditional telecom. |
Which is why they're mispriced, and it's also why my newest recommendation below for Premium Members is a must in your portfolio. |
Many of the most important optical players are buried inside diversified companies… or ignored entirely. |
But the leverage they hold is immense. |
Because if you can't move the data fast enough, your trillion-dollar AI dreams are just noise. |
As I've written about here and here, this isn't about picking winners in AI. |
It's about identifying the rails that all winners must run on. |
Optical interconnects are no longer optional. |
They are the key to scaling the next wave of compute—from LLMs and foundation models to synthetic biology, autonomous systems, and real-time simulation. |
And they will determine which platforms dominate… and which collapse under their own bandwidth. |
I'll cover the most investable names, and the highest-conviction entry points, in this week's premium summary below. |
Because in a world racing toward intelligent infrastructure, the smart money isn't just buying AI. |
It's buying the photons that make AI possible. |
If you're a Premium Subscriber, read on. And if you're not, I urge you to become one today. |
Double D |
P.S. If you're a Premium Member, you may have noticed there's a new Portfolio page on the Moonshot Minute website. When you open it, and if you're a Premium Member in good standing, you'll see a new portfolio page that looks like this: (I've blurred out the actual recommendations below) |
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You can always go to any email I send you and scroll to the bottom for the paid research and ideas, but many of you asked for a single place to see all of the recommendations I've made. |
Check it out today and let me know what you think. |
🔓 Premium Content Begins Here 🔒 |
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In today's Premium Section, I have a new recommendation I'm buying during this massive global shift. | I hope you've been paying attention because we're currently beating the S&P nearly 3-to-1 since mid-April | Most financial newsletters charge $500, $1,000, even $5,000 per year. Why? Because they know they can. | I don't. | I built my wealth the old-fashioned way, not by selling subscriptions. | That's why I priced this at $15/month, or $150/year. | Not because it's low quality, but because I don't need to charge more. | One good trade, idea, or concept could pay for your next decade of subscriptions. | The question isn't 'Why is this so cheap?' The question is, 'Why would I charge more?' | 👉 Upgrade to Premium Now | P.S. If this newsletter were $1,000 per year, you'd have to think about it. | You'd weigh your options. You'd analyze the risk. | But it's $15 a month. | That's the price of a bad lunch decision. | And remember, just one good idea could pay for your subscription for a decade. | 👉 Upgrade to Premium Now | |
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