The demand for high-speed AIDC interconnection continues. Will OCS be the next answer?

When the volume of data grows exponentially, OCS, as an all-optical switching solution, is expected to lead the next era of photonic communication.

Just last month, Jensen Huang, the founder of NVIDIA, vividly described such a vision: "In the future, AI factories should not only be large but also be able to connect data centers across cities, countries, and even continents."

Realizing such a vision is no easy feat. The reality is that as AI data centers continue to expand in scale, the huge data transmission requirements also bring higher latency and energy consumption problems. Even NVIDIA itself admits that network latency across data centers is an important challenge for AI training and computing.

In 2009, when the world had just entered the era of mobile Internet, the Nobel Committee for Physics described the then-awarded optical communication technology as follows: "Light flows through glass fibers as thin as threads, carrying all kinds of information and data in every direction. As a result, text, music, pictures, and videos can spread across the globe in an instant."

16 years later, OCS (Optical Circuit Switch) - a device developed from optical communication technology that can directly complete signal switching in the optical domain - is redefining the "light-speed" potential of data transmission with its low latency and low energy consumption attributes.

On August 22, NVIDIA announced the launch of Spectrum-XGS Ethernet, which provides broad application prospects for OCS. This technology, called "scale-across", aims to extend the ultimate performance and scale of Ethernet to different regions, break the limitations of buildings, and connect isolated data centers around the world into a "super GPU".

When data centers around the world are connected by the same Ethernet and hundreds of thousands of computing nodes inside operate collaboratively, the network latency also increases exponentially. At this time, to maintain stable computing, OCS with a large number of ports and high bandwidth is more suitable for upper-layer network switching between data centers.

Why OCS?

In the data center network, traditional switches are like "interpreters". They convert the input fiber-optic data into electrical signals for processing, and then convert the electrical signals back into optical signals for output after processing. The whole process is time-consuming and laborious. Among them, the more well-known advanced version is the CPO (Co-packaged Optics) switch. This technology integrates the optical engine and the switching chip on the same substrate to achieve efficient conversion and transmission between electrical and optical signals.

However, when the volume of transmitted data grows exponentially, as an upgraded solution based on the existing electrical switching architecture, CPO may seem inadequate.

In contrast, OCS constructs a completely different technical path. By reconstructing the physical path of the optical signal itself, it directly eliminates the optoelectronic conversion process. If the CPO switch is compared to a "highway" for optical signals, then OCS is more like an "overpass for light" - when facing congestion, instead of simply increasing the speed, it is better to open up a new road.

In a 2023 paper, Google researchers calculated that the cost of the OCS hardware part and related fiber-optic components is less than 5% of the cost of the entire supercomputing system, and the power consumption is less than 3% of the total system power consumption, showing cost and efficiency advantages. So, Google immediately introduced a large number of OCSs into its Jupiter data center network and became the first player in the all-optical switching field.

Google's bold bet on new technology has paid off. According to a report by semiconductor analysis firm SemiAnalysis, Google's customized OCS network has increased the throughput of its entire network by 30%, reduced power consumption by 40%, shortened the data flow completion time by 10%, reduced network downtime by 50 times, and reduced capital expenditure by 30%.

More importantly, the huge effectiveness has made the market see the potential of OCS. Market research firm Cignal AI believes that in addition to Google, more manufacturers will invest in the OCS field after 2025. Considering that the deployment volume of OCS in the core layer of data centers and AI clusters is expected to continue to grow, the market size is expected to exceed $1.6 billion by 2029. Guosheng Securities even said that OCS is expected to lead the next era of photonic communication.

Tech Giants are Flocking In

Regardless of how much room for growth OCS has in the future, at least the tech giants have taken action.

In July 2025, the Open Compute Project (OCP) announced the establishment of an OCS sub-project. This project aims to promote collaboration on open optical switching technology and drive the development of OCS towards openness and standardization, thus forming global industry standards. The initial members of the project include Lumentum, Google, Microsoft, NVIDIA, Coherent, iPronics, etc.

It is worth mentioning that as the leader of the above project, Lumentum has already earned its "first pot of gold" from OCS. At the second-quarter earnings conference, Lumentum said that its OCS business has started shipping to two hyperscale cloud providers, and shipments to a third hyperscale customer are imminent. The company will accelerate the expansion of its OCS production capacity, and it is expected that the related business will contribute hundreds of millions of dollars in revenue in the future.

Domestically, Huawei has launched the all-optical data center switch Huawei OptiXtrans DC808, which uses MEMS technology to achieve high-speed and stable all-optical switching. At the recently held Interop Tokyo 2025 exhibition in Japan, this product also won the Best of Show Award.

Of course, these developments do not mean that OCS can rest easy. There are still problems that require the joint participation and efforts of the entire industry to solve. From a technical perspective, OCS is not a full replacement for optoelectronic switching solutions such as CPO. As NVIDIA said at the OCP EMEA 2025 conference, the manufacturing cost of current optical switches is still significantly higher than that of electrical switches. Only when the two solutions (CPO and OCS) are combined can the power consumption be further reduced.

There are also disputes over solutions within the OCS field. Currently, among the three technical paths of MEMS, Digital Liquid Crystal (DLC), and Direct Beam Steering (DBS) using piezoelectric ceramics, the core application customers of the MEMS solution are Google, and there are also more participating manufacturers; the DLC solution is currently mainly developed by Coherent and is gradually being introduced into the CSP supply chain; the DBS solution is the exclusive technology of Polatis and is still not mature.

CITIC Securities reminds that the use of OCS in AI data centers is still in its early stage, and most manufacturers are still actively conducting research and development. The OCS technology route has high feasibility, obvious advantages, and strong certainty of future growth. It is recommended to keep an eye on the entire industry chain, including complete machines, core components, and optical parts.

This article is from the WeChat official account "Science and Technology Innovation Board Daily". Author: Zhang Zhen. Republished by 36Kr with permission.