Goldman Sachs: Optical networks are the next trend in AI infrastructure, with TAM increasing 9 times to 154 billion USD

Goldman Sachs' Global Technology Equity Research Team released a report on April 17, 2026, stating that networks unlock the computing power of a single AI chip by connecting multiple chips, enabling seamless data exchange and low latency. With the expansion of AI infrastructure and the enhancement of computing power, various configurations are expected to see growth, further opening up a 9-fold Total Addressable Market (TAM) space to $154 billion.

The report pointed out that the dollar content of horizontal and vertical scaling increases by 16 times and 45 times, respectively; the TAM for optics expands 13 times from horizontal to vertical scaling; the market value of pluggable optical modules in horizontal scaling expands 10 times from AI server models in the second half of 2025 to models in the second half of 2027. The authors include Allen Chang, Verena Jeng, James Schneider, Mark Delaney, among others.

The total dollar content for each computing unit in vertical and horizontal scaling is expected to increase from $315,000 for GB300 NVL72 to $9.4 billion for Rubin Ultra NVL576, a 29-fold increase. The total value TAM increases 9 times to $154 billion (mainly in 2028), of which 69% ($106 billion) comes from vertical scaling. The analysis covers the dollar content and market opportunities of configurations such as copper cables, pluggable optical modules, CPO, and PCB backplanes.