In San Jose, California on Tuesday, Nvidia's CEO Jensen Huang mentioned that a new chip technology called co-packaged optics, utilizing laser light to transmit data among chips through fiber optic cables, offers improved energy efficiency and faster connections. While announcing the use of this technology in two new networking chips for servers to increase energy efficiency, it was made clear that current implementation in flagship GPUs may not be feasible due to reliability concerns. Despite the potential advantages of co-packaged optics, Huang highlighted that traditional copper connections are much more dependable and preferred for GPUs at present. Nvidia's strategic focus remains on providing reliable product roadmaps for customers like OpenAI and Oracle, preparing for the growing demand in AI infrastructure. Silicon Valley is keeping a close eye on optics technology, anticipating its role in advancing AI systems that require increased computing power. Startups like Ayar Labs, Lightmatter, and Celestial AI are actively exploring optical connections for AI chips, with some of them securing significant funding, including from Nvidia, and eyeing potential public offerings in the future.