While AI applications dominate the conversation, a less-visible hardware trend is already delivering results. Key photonics companies are posting strong earnings, validating the theme for investors in AI and robotics and automation ETFs.
Traditional data centers, built on copper wiring, move data using electricity. This process wastes enormous amounts of energy as heat, as well as creates a limit as to how fast data can be transferred. For power-hungry applications like AI, this is a major headwind.
This is where photonics, the science of using light (photons) to transmit data, can offer efficiency gains. By replacing legacy wiring with optical interconnects and fiber optics, data can move at the speed of light with virtually no heat generation.
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