Goldman Sachs: Optical Networks Drive AI Infrastructure TAM to $154 Billion

Goldman Sachs' global technology equity research team has released a report predicting that by 2028, optical networks will drive the total addressable market (TAM) for AI infrastructure to grow ninefold, reaching $154 billion. The report highlights that networks enhance the computing power of individual AI chips by connecting multiple chips, facilitating seamless data exchange and low latency. As AI infrastructure expands, related configurations are expected to see growth. The dollar content for horizontal and vertical scaling is projected to increase 16 times and 45 times, respectively, with the TAM for optics expanding 13 times from horizontal to vertical scaling. The market value of pluggable optical modules in horizontal scaling is expected to grow tenfold from AI server models in the second half of 2025 to models in the second half of 2027. The total dollar content for each computing unit in vertical and horizontal scaling is expected to rise from $315,000 to $9.4 billion, a 29-fold increase. The analysis covers the dollar content and market opportunities for configurations including copper cables, pluggable optical modules, CPOs, and PCB backplanes.

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