Chip giant Nvidia is investing some $2 billion in Lumentum, a California-based developer of optical and photonic technologies, to bolster its already flourishing networking stack.

The non-exclusive agreement will see Nvidia’s capital help boost Lumentum’s research and development efforts, as well as build out its manufacturing capabilities with a new fabrication site.

“Together with Lumentum, Nvidia is advancing the world’s most sophisticated silicon photonics to build the next generation of gigawatt-scale AI factories,” Nvidia CEO Jensen Huang noted in a statement.

Founded in 2015, Lumentum develops high-performance lasers, modules, and optical subsystems designed to boost connectivity for use in data centers and telecom networks.

Prior to this investment, the company already enjoyed a fruitful partnership with Nvidia, with the latter’s Spectrum-X and Quantum-X networking switches featuring Lumentum’s indium phosphide (InP) laser solutions to boost the interconnect’s energy efficiency.

This latest agreement adds to Nvidia's already aggressive efforts to shore up its supply chain amid growing industry component shortages, with it committing to securing future capacity access rights to Lumentum's laser components.

Huang and company have already moved to buttress its supply of electro-absorption modulated lasers (EML) to such a degree that reports claim rival optical module makers could face wait times for components beyond 2027.

Nvidia’s efforts to shore up its own supply chain may just increase lead times for other transmissions over long distances – making them vital for use in high-speed optical communication systems, including in data centers to boost network performance and efficiency.

The move won’t likely faze Lumentum, with CEO Michael Hurlston saying the company was “excited” to work with Nvidia to “expand what’s possible for the AI optical architectures of tomorrow.”

“This multiyear strategic agreement reflects our shared commitment to advancing the optics technologies that will power the next generation of AI infrastructure,” Hurlston added.

Lumentum joins a growing list of optical developers Nvidia has opted to inject investment into, such as Coherent, the parent company of optical component maker Finisar.