Coherent designs and manufactures optical components, subsystems, and transceivers used across telecommunications networks, data centers, and industrial applications. In the context of AI infrastructure, its most relevant products are datacom transceivers—the optical modules that convert electrical signals to light and back, enabling high-bandwidth communication between servers over fiber optic cables. These transceivers form the interconnect fabric inside and between GPU racks in large AI clusters.

AI compute has driven a significant increase in bandwidth requirements for data center optical networking. A large AI training cluster connects thousands of GPUs that must exchange data continuously during training runs, and the network connecting them must operate at hundreds of gigabits per second per link. The industry has transitioned from 400G to 800G transceivers and is developing 1.6T products, with each generation requiring more sophisticated optical components.

In 2025, Coherent launched new EML and DFB laser products targeting 800G and 1.6T transceiver applications. The company has been contracted as a component supplier for hyperscaler AI networking expansion programs. Revenue growth has been driven by both the volume of new AI cluster deployments and the generational upgrade cycle within existing clusters, as operators replace 400G infrastructure with higher-speed products to accommodate growing AI workload bandwidth demands. In 2026, Coherent received $2B in investment from NVIDIA. Coherent delivered Q2 FY2026 revenue of $1.69 billion, up 17% year-over-year, driven by strong data center and communications demand.