Will a switch to light speed cut power use at data centres?

Widespread industry adoption of optical interconnects would likely benefit photonics and optical component suppliers while putting downward pressure on data centre operating expenses, potentially shifting investor focus toward efficiency gains and capex intensity in the sector.

If optical switching remains confined to niche deployments or pilot projects without broad industry standardization, the technology would see modest incremental demand while data centre power consumption trends continue on their current trajectory, leaving sector valuations largely unchanged.

Should optical infrastructure prove more costly, complex, or power-intensive to deploy than copper alternatives at scale, or face unforeseen technical barriers, data centre operators might retreat to conventional architectures, potentially dampening near-term demand for photonics vendors and raising questions about the viability of efficiency-driven capex cycles.