Ciena adds Nubis Communications to its growing data center portfolio
Key Highlights
- Ciena is acquiring Nubis Communications in an all-cash deal valued at $270 million, expected to close in Q4 2025.
- The acquisition will expand Ciena’s data center portfolio with Nubis’ high-performance optical and electrical interconnect solutions, including co-packaged optics and active copper cables.
- Nubis’ technologies support AI workloads by enabling higher bandwidth, lower latency, and reduced power consumption inside data centers.
- The deal adds over 50 engineers with deep expertise, strengthening Ciena’s R&D capabilities in data center interconnects.
- This strategic move aligns with Ciena’s shift away from broadband PON investments toward optical, routing, and data center network solutions to meet cloud and AI demands.
Ciena’s latest move to Nubis Communications, a privately-held company headquartered in New Providence, New Jersey, reflects the optical vendor’s growing emphasis on serving data center opportunities as hyperscalers and cloud providers scale operations.
The company said the addition of Nubis, which specializes in high-performance, ultra-compact, low-power optical and electrical interconnects tailored to support AI workloads, will expand Ciena’s portfolio and add critical talent to address a wider range of opportunities inside the data center.
Under the terms of the agreement, Ciena will acquire Nubis in an all-cash transaction for $270 million.
Having been approved by the boards of directors of both companies as well as Nubis’ shareholders, the deal is expected to close during Ciena’s fiscal fourth quarter 2025 and is subject to customary closing conditions.
“We believe that Ciena’s acquisition of Nubis Communications is a key strategic move that is designed to meet the clear and growing demand for high-performance, low-power connectivity inside the data center, driven by AI,” said David Rothenstein, Chief Strategy Officer at Ciena.
This acquisition comes on the heels of Ciena’s announcement to divert investments away from its PON broadband unit by emphasizing investments in optical, routing and network management systems. It brings Ciena’s broadband push that began in 2022 when it acquired Tibit Communications and Benu Network, with a promise of creating virtual PON networking platforms to a close.
Gary Smith, CEO of Ciena, told investors during its fiscal third quarter 2025 earnings call, “We will be redirecting additional R&D investment into these technologies and away from our residential broadband access portfolio, given the larger customer priorities for AI-driven and cloud network investments over the next several years.”
What are scale-up networks?
AI scale-up networks refer to the architecture within a single compute cluster, designed to enhance communication between GPUs, enabling high-bandwidth, low-latency connections for faster processing. These networks are crucial for scaling AI workloads by maximizing the performance of a single system. In an optical network, scaling up involves increasing the capacity and reach of optical networks to handle growing data demands. This is achieved through various techniques, including increasing the capacity per port, utilizing wider fabrics, and leveraging advanced technologies like co-packaged optics and silicon photonics.
Complementary approaches
Nubis’ solutions complement Ciena’s existing high-speed interconnects portfolio and will enable new capabilities to support growing AI workloads by increasing scale-up and scale-out capacity and density inside the data center.
In addition, the acquisition will strengthen Ciena’s expertise inside the data center, with the addition of 50+ talented engineers with deep technical expertise and strong cultural alignment with Ciena’s R&D team.
The Nubis portfolio includes two key technologies, which will allow Ciena to address near-term and long-term copper and optical opportunities for data centers:
● Co-Packaged Optics (CPO) / Near Packaged Optics (NPO): Combined with Ciena’s high-speed SerDes, Nubis’ optical engines enable what they claim will be differentiated CPO solutions to address connectivity needs inside and between racks.
● Electrical ACC: Nubis’ advanced analog electronics enable Active Copper Cables (ACC) to support high-speed data transmission, allowing data to travel up to 4 meters at speeds of 200 Gbps per lane.
These products reflect that fact that cloud providers, including hyperscalers and neoscalers, are therefore working to scale connectivity in the back-end AI fabric architecture across three domains based on distance: scale up within server racks inside data centers; scale out between multiple racks inside data centers that form AI clusters; and scale across between multiple data centers that are geographically distributed and for massive AI super factories.
With the advent of AI taking up more power in data centers, the shift away from copper to optical technologies will bring increased bandwidth with reduced power consumption.
Rothenstein said this is being driven by the fact that cloud providers, including hyperscalers and neoscalers, are scaling connectivity in the back-end AI fabric architecture across three domains based on distance: scale up within server racks inside data centers; scale out between multiple racks inside data centers that form AI clusters; and scale across between multiple data centers that are geographically distributed and for massive AI super factories.
“This scaling, combined with power constraints due to energy consumption of growing GPU compute clusters, is driving a shift from electrical to optical technologies,” he said. “Over time, coherent optics will play a larger role in the data center, similar to their adoption in wide area networks, as speeds increase to 100G. Today, short distance scale up, up to a few meters, relies on electrical interconnects like electrical or copper cables, while longer scale out distances up to several kilometers use intensity modulated direct detect (IMDD) pluggables.”
Rothenstein added that today’s technologies have various limitations. “With electrical interconnects, the signal integrity degrades as data rates rise, limiting distance and performance,” he said. “And with IMDD pluggables, bulky designs and power-intensive components like DSPs are increasingly inefficient. These limitations are in turn driving important technological shifts inside the data center.”
However, the near-term reality is a mix of electrical, IMDD, co-packaged, and near-packaged optics, and coherent solutions will coexist.
“These shifts present a significant market opportunity, with early projections estimating the co-packaged optical and electrical interconnects market to reach between $5 and $10 billion by 2030,” Rothenstein said. “Ciena and Nubis complement each other well in this evolving space. More recently, Ciena has been working with cloud providers to scale their GPU clusters across data centers and regions, building out their AI backbones to support the demands of increasing AI training and inference workloads.”
Addressing campus, inside data center needs
As Ciena continues to develop its product set and data center focus with Nubis coming into the fold, the company is adapting its optical interconnect technology to focus on two key elements: data center campus and inside the data center.
This focus includes the vendor’s 1.6T Coherent-Lite plug, powered by its 224G SerDes, which has a higher loss budget at comparable power consumption to IMDD. Additionally, Ciena demonstrated its 448G PAM 4 in silicon, leveraging ultra-high bandwidth converters built on low-power 3-nanometer CMOS technology.
Nubis has focused on developing innovations for inside the data center. The company provides ultra-compact, low-power electrical and optical interconnects that enhance bandwidth and reduce latency for scale-up within racks and scale out between racks.
Specifically, Nubis has focused its efforts on creating two main solutions. The company’s XT Optical Engines are optical modules that enable data transfer using light instead of traditional electrical signals, with support up to 6.4 Tbps full-duplex bandwidth. These products support both co-packaged and near-packaged optics through ultra-dense, low-power linear designs that eliminate the need for retimers and DSPs, reducing latency and improving signal integrity, making them ideal for scale-up and scale-out applications inside the data center.
Likewise, Nubis’ Electronics Interconnect solution, the Nitro Linear Redriver, enables Active Copper Cables or ACC, essentially chips inside the cable harness to support high-speed data transmissions, allowing data to travel up to 4m at speeds of 200G per lane.
“Together, Ciena and Nubis will now be able to better address critical challenges for customers in and around the data center, positioning us to capitalize on this growing market opportunity,” Rothenstein said.
For related articles, visit the Data Center Topic Center.
For more information on high-speed transmission systems and suppliers, visit the Lightwave Buyer’s Guide.
To stay abreast of fiber network deployments, subscribe to Lightwave’s Service Providers and Datacom/Data Center newsletters.
Optical scale-up connection to drive LPO, CPO growth
LightCounting predicts “strong growth” for sales of Ethernet optical transceivers, including re-timed modules, linear drive pluggables (LPO), and co-packaged optics (CPO). One key area that will be key in future optical growth will be the use of optical connectivity in AI scale-up networks. Between 2026 and 2030, LightCounting expects co-packaged optics (CPO) to emerge as the best option for connectivity in scale-up networks, due to higher bandwidth density and reliability. Further, as enthusiasm around AI inevitably tapers off, the research firm said it projects 30-35% annual growth in 2025 and 2026 and 15-20% in 2027-2030.
About the Author
Sean Buckley
Sean is responsible for establishing and executing the editorial strategy of Lightwave across its website, email newsletters, events, and other information products.