Nvidia (NVDA 0.79%) has been one of the undisputed winners of the artificial intelligence (AI) boom, and demand for these next-generation algorithms continues to ramp higher. Comments from big tech executives in recent months suggest the only thing slowing even more rapid adoption is supply constraints for crucial components used by data centers.
The AI chipmaker just unveiled a massive new deal with glassmaker Corning (GLW 1.52%) to alleviate one of these bottlenecks.
Image source: The Motley Fool.
In a joint press release that dropped on Wednesday, Nvidia and Corning announced a major multiyear collaboration to "dramatically expand U.S.-based manufacturing of the advanced optical connectivity solutions needed to power next-generation AI infrastructure."
As part of the deal, Corning will build three new manufacturing facilities in North Carolina and Texas, which will increase the company's optical connectivity supply production in the U.S. by 10-fold and its optical fiber production by 50%.
As part of the deal, Nvidia will have the option to invest up to $2.7 billion in Corning. Nvidia will receive warrants that allow it to buy as many as 15 million shares of Corning stock at $180 per share. For context, Corning closed at about $162 on Tuesday, before today's deal-inspired rally pushed the stock above the exercise price. Additionally, Nvidia also received pre-funded warrants to buy 3 million shares for $500 million.
NASDAQ: NVDA
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Nvidia CEO Jensen Huang said, "AI is driving the largest infrastructure build-out of our time -- and a once-in-a-generation opportunity to reinvigorate American manufacturing and supply chains." He went on to say that, "Together with Corning, we are inventing the future of computing with advanced optical technologies -- building the foundation for AI infrastructure."
Details about the specific products to be manufactured weren't revealed, but this likely signals a larger move by Nvidia to begin replacing copper cables with next-generation fiber -- called co-packaged optics (CPO) -- in its rack-scale systems. At last year's GTC, Huang touted CPO as critical components to support the AI data center build-out.
CPO provides several advantages over its copper predecessor. In a blog post from late 2025, Corning's Senior Vice President of Technology Claudio Mazzali said, "By co-packaging optics directly with the chip, we can significantly reduce power consumption, improve data speeds, and free up valuable space inside the chip. This technology will be critical for the future of AI and cloud computing."
It looks like the future is upon us.
NYSE: GLW
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What this means for investors
Nvidia has invested billions and entered into strategic partnerships with a growing number of companies. By collaborating with Corning, Nvidia is ensuring future access to critical optical components that are in increasingly short supply.
For Corning, this serves as validation of its technology and helps the company expand its manufacturing footprint.
Both Nvidia and Corning have been massive winners as the AI boom has unfolded, rising 1,300% and 481%, respectively. Those soaring stock prices have been accompanied by significant valuation increases, but one is clearly cheaper. Nvidia is selling for 25 times forward earnings, compared to a multiple of 58 for Corning. Both companies are well-positioned to ride the wave of AI adoption higher, but Nvidia is the better bargain.
