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Now that makes for good optics.
Shares of 175-year-old materials-maker Corning soared to an all-time high last week following the announcement of a multi-billion dollar partnership with AI kingmaker Nvidia to make fiber-optics. It’s a big win for the company best known for making iPhone screens, and comes as the American AI industry scrambles to near-shore its supply chain.
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Factory Setting
Nvidia’s interest in Corning is twofold. First, like much of the rest of the tech industry, tariffs and geopolitical tensions have left Nvidia eager to reduce exposure to Taiwan, China and Vietnam (see: Apple’s recently increased interest in domestic chipmaker Intel). Second, its next-gen chips are pushing up against the limits of copper wire, leaving high-tech fiber-optic cables as a suitable (and now critical) replacement.
The deal struck between the companies last week is Nvidia’s attempt to kill two birds with one stone and a couple of billion dollars:
According to regulatory filings, Nvidia is investing $500 million in Corning stock, with the right to acquire up to 15 million more shares for a total equity stake worth roughly $3.2 billion.
In turn, Corning has pledged to increase its domestic fiber optic production capacity by 50%, with plans to build three new US manufacturing plants in North Carolina and Texas that will employ some 3,000 workers.
“We’re going to scale up optical at a scale that, quite frankly, no optical companies have ever enjoyed,” Nvidia CEO Jensen Huang said during an interview on CNBC’s Mad Money last week, adding that the company aims to help “revitalize American manufacturing for the first time in several generations.”
Metatextual: For Corning, it’s the second major Big Tech deal this year, after landing a $6 billion partnership with Meta in January, also to supply fiber optics. Shares of Corning are up roughly 110% so far this year and 320% in the past 12 months. Not bad for the company that invented Pyrex glass cookware more than a century ago.
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