Co-packaged optics deployments will start in 2026, says Cignal AI

March 20, 2025
The research firm notes hyperscalers will conduct early deployments.  

One of the initial applications for CPO is in the scale-up AI networks. In this scenario, CPO will enable higher connectivity and longer distances than copper.

As AI nodes expand, the initial high-volume deployments will start in the scale-up network as an alternative to copper before migrating to the scale-out network. In the scale-up, hyperscalers will struggle to keep up with bandwidth, density, and power demands, but today, copper still has the upper hand in terms of power and cost.  

Cignal AI said these factors make it “hard to dislodge” copper in favor of CPO.

CPO’s impact on pluggable optics will be minimal during the copper replacement process. However, once this application is proven in volume, CPO cannibalizes pluggable optics in scale-out applications.

While the scale-out is already optical-based and could be a good place to initiate CPO deployments, the research firm notes that existing solutions working well (pluggable) and improved solutions that can be adopted (LPO/LRO) are available. As a result, there is less immediate need for CPO.

“The industry recognizes CPO’s undeniable benefits, but the technology is still not competitive with pluggable optics which are working well,” says Scott Wilkinson, lead analyst at Cignal AI. “There are positive signs for CPO deployment by 2026, but large-scale deployments will require investment by motivated industry actors like hyperscalers or Nvidia.”

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About the Author

Sean Buckley

Sean is responsible for establishing and executing the editorial strategies of Lightwave and Broadband Technology Report across their websites, email newsletters, events, and other information products.

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