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High Tech Solutions to Drive Business Transformation through Technology
Highlights
- Traditional electrical interconnects can no longer keep up with the bandwidth, power, and thermal demands of large-scale AI systems, making connectivity the primary constraint on performance and cost.
- By integrating optical connectivity directly with compute and switching silicon, co-packaged optics (CPO) enables significantly higher bandwidth, lower latency, and significant reduction in interconnect power, unlocking scalable, energy‑efficient AI data centres.
- Organisations adopting CPO can achieve faster AI deployment, lower total cost of ownership, and improved sustainability outcomes, thereby positioning themselves for long‑term competitive advantage in an AI‑driven world.
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Executive summary
By bringing optical connectivity directly into compute and switching packages, co-packaged optics replace power‑hungry electrical links with light‑based data movement at the source.
AI is reshaping data centres at an unprecedented pace. As models grow larger and inference moves closer to real time, the real bottleneck is no longer compute—it’s how fast and efficiently data can move. Traditional electrical connections, while reliable for decades, are now struggling to keep up with AI’s demands on bandwidth, power consumption, and cooling.
Co‑packaged optics offer a breakthrough. By bringing optical connectivity directly into compute and switching packages, CPO replaces power‑hungry electrical links with light‑based data movement at the source. The payoff is decisive: far higher bandwidth density, lower latency, reduced power and cooling needs, and a smaller environmental footprint. This paper explains why CPO is becoming foundational to next‑generation AI data centres, what it takes to adopt it at scale, and how TCS helps organisations convert CPO innovation into real business value; enabling AI infrastructure that is faster, more sustainable, and built for long‑term growth.
Inflection point
Why AI is forcing a rethink of interconnects.
AI workloads are fundamentally different from traditional enterprise computing. Training large language models and operating real‑time inference engines require thousands of accelerators to function as a tightly synchronised system. In this environment, the movement of data—between GPUs, switches, memory, and storage—matters as much as the compute itself.
As data rates climb, copper‑based electrical links face escalating challenges, such as:
- Power inefficiency due to signal loss and equalisation overhead.
- Thermal stress that drives up cooling costs.
- Latency constraints that limit AI workload scaling.
- Economic limits as energy and infrastructure costs grow faster than compute gains.
Without an architectural change, these factors cap the return on AI investments.
Co‑packaged optics resolves this constraint by radically shortening electrical paths and shifting most data transport into the optical domain. Light travels farther, faster, and with less energy loss than electrons, enabling data centres to scale performance without linear increases in power and cooling.
Impact
What co‑packaged optics change.
Co‑packaged optics integrate optical engines like lasers, modulators, and photodetectors, directly into the same package as processors or network switches. Instead of pushing high‑speed electrical signals across boards and connectors, data is converted to optical signals at the package boundary.
This architectural shift delivers strategic advantages:
- Exponential bandwidth density within the same physical footprint.
- Significant reduction in interconnect energy consumption.
- Lower end to end latency for distributed AI workloads.
- Improved system reliability through simplified signalling paths.
For AI leaders, CPO is not an incremental improvement, it is an enabler of architectures that are otherwise infeasible.
Barriers to adoption
Why CPO is hard yet worth it.
While the promise of CPO is clear, scaling it into production environments introduces new challenges that must be managed holistically:
Thermal and power co‑design.
Bringing optics and electronics into close proximity increases thermal density. Success demands advanced cooling, intelligent placement, and system‑level power optimisation.
Optical device reliability.
Lasers and photonic components must operate efficiently over long lifetimes, often at elevated temperatures, without compromising performance or availability.
Advanced packaging complexity.
CPO relies on cutting‑edge 2.5D and 3D packaging, precision alignment, and high‑yield manufacturing processes that stretch traditional supply chains.
Cost and time‑to‑market pressures.
Early CPO programs must balance innovation with commercial realities; controlling cost, maximising yield, and meeting aggressive deployment timelines.
Organisations that address these challenges in isolation risk delays, cost overruns, or suboptimal designs. Those that adopt a system‑level strategy gain a sustainable competitive advantage.
Adoption
Technology momentum and the path to maturity.
The CPO ecosystem is transitioning rapidly from experimentation to scale, driven by innovation across silicon, photonics, and packaging:
- Optical engines advancing toward 200G per lane and beyond.
- Hybrid bonding and glass interposers enabling higher integration density.
- Industry movement from pluggable optics to near package and full CPO.
- AI driven co design tools optimising electrical, optical, and thermal trade offs.
- Increasing standardisation across interfaces, validation, and form factors.
Industry adoption curves indicate that CPO will become mainstream for high‑capacity AI switches and GPU fabrics later this decade, defining the architecture of AI data centres by default.
The TCS approach
De‑risking co‑packaged optics at scale.
TCS supports organisations by establishing an end-to-end framework and leveraging relevant expertise to address product leadership complexity.
Integrated multi‑domain co‑design.
A unified design environment spanning electrical, optical, mechanical, and thermal domains which enables early trade‑off optimisation and faster convergence.
Advanced packaging and manufacturing expertise.
Deep capabilities across 2.5D/3D integration, interposers, hybrid bonding, and optical fibre attachment, aligned with leading foundry ecosystems.
Comprehensive validation and qualification.
Electro‑optical testing under real AI workloads, covering signal integrity, power efficiency, thermal stress, and long‑term reliability.
Ecosystem orchestration.
Program governance across silicon vendors, photonics suppliers, packaging partners, and platform providers, which reduces coordination risk.
AI‑optimised system architecture.
Design of CPO‑enabled clusters and fabrics focused on scalability, total cost of ownership, and sustainability.
This approach enables organisations to move from pilot programs to production with confidence.
Looking ahead
From interconnect to optical‑first AI.
The future of AI infrastructure is optical‑centric. Advances in deep 3D integration, on‑package wavelength‑division multiplexing, and dynamically reconfigurable optical networks will redefine how systems are built and scaled. Optical interconnects are expected to dominate not only inter‑rack but also intra‑rack and intra‑package communication.
Strategic actions for organisations today:
- Launch CPO readiness and proof of concept initiatives.
- Invest in multi physics design and optical validation capabilities.
- Partner with experienced integrators.
- Align AI infrastructure roadmaps with long term energy and sustainability objectives.
Conclusion
Co‑packaged optics represent a decisive shift in AI data centre design—one that unlocks performance, efficiency, and scalability beyond the limits of electrical interconnects. While technical and ecosystem challenges remain, the trajectory is clear: AI at scale requires optical‑first thinking.
With deep domain expertise, proven delivery frameworks, and strong ecosystem partnerships, TCS enables organisations to move confidently into the CPO era—building AI infrastructure that is not only powerful, but economically and environmentally sustainable for the future.