Global AI Computing Power Continues to Increase, Optical Module Market Prosperity Rises

Open AI is about to launch a new product. On May 11, Open AI founder Sam Altman stated on social media that a new product will be released at 10 AM on Monday. Although it is not GPT-5 or a search engine, it will be something that people are interested in. The market had previously anticipated that Open AI would launch a new product this summer, and Sam's announcement will once again draw the market's attention to AI.

The prosperity of overseas optical communication continues to rise, and the market scale is constantly expanding, mainly reflected in three aspects:

1. 800G service acceleration. A certain optical module manufacturer disclosed an $800 million revenue of $200 million, expecting to exceed $250 million next quarter, a quarter-on-quarter increase of 25%.

2. The continuation of the 800G market sentiment exceeds expectations. A certain manufacturer expanded its 800G customers from 2 to 4, with an expected compound annual growth rate of 60% over the next 5 years. Another manufacturer stated that 1.6T will not replace 800G, and both will experience strong growth.

3. 1.6T acceleration landing assists in the expansion of market scale. A certain manufacturer stated that it will start sending samples of 1.6T in the third quarter of this year, with mass production in the first quarter of next year. Another manufacturer indicated that it can ship 1.6T modules this summer and will accelerate production next year.

The financial reports of overseas optical module manufacturers reflect the sustainability of the industry's prosperity and the accelerated development trend driven by 1.6T. The demand for 800G is widely recognized, and the launch of 1.6T will not directly impact the overall industry prosperity. The increase in revenue and profits of leading manufacturers has also alleviated market concerns about price wars. Currently, the development speed of AI is much higher than the speed of Computing Power supply, and in the short to medium term, the market will maintain a state of supply not meeting demand.

AI is driving the rapid development of liquid cooling technology, and heat dissipation has become an important link in the later stages of AI development. With the upgrade from 800G to 1.6T, high power consumption and high-density cabinets have become a necessity, significantly increasing the demand for cabinet cooling capabilities. A certain manufacturer's liquid cooling solution has been installed in 100KW racks, with a power density 2-3 times that of traditional racks. This manufacturer can produce over 2000 liquid cooling racks each month, with each supporting 100-120KW.

The "hundred-kilowatt" era of individual cabinets has arrived, and the demand for both indirect and direct liquid cooling is expanding simultaneously. In the future, cooling may become one of the key factors restricting the computing power density of individual cabinets, and the status of the liquid cooling industry is expected to further improve. The importance of the cooling track should not be lower than that of the development of computing power itself.