Co-Packaged Optics: The Breakthrough Innovation Supercharging Generative AI Computing and Data Centers
Generative AI computing is a game-changer for modern industries. As a technology, GenAI is rapidly transforming industries by enabling machines to create everything from text and images to music and code. However, to fully unleash its potential, we need an entirely new approach to handling the immense data and computational demands it requires. The Chiplet and Advanced Packaging team at IBM Research has unveiled co-packaged optics, a groundbreaking advancement in Chip Assembly and Packaging. This cutting-edge technology is set to enhance energy efficiency and increase bandwidth by integrating optical link connections directly into devices and within data centers that power the training and deployment of large language models.
IBM’s co-packaged optics development includes rigorous stress testing to ensure the reliability of optical and electrical links under real-world conditions, such as extreme temperatures and mechanical stress. These tests at IBM’s facilities in Yorktown Heights and Bromont demonstrate that the new technology can endure challenges that previous optical links could not. The modules are designed to be compatible with standard advanced packaging processes, potentially reducing production costs. IBM is also developing a roadmap to integrate client feedback and adapt the technology to meet the growing demands of generative AI computing while working with component suppliers to ensure scalability for full production.
This is what the future of generative AI computing looks like with co-packaged optics.
The Challenge of Scaling AI
Generative AI outcomes have often seemed almost too good to be true. It slashes coding time from days to minutes, tailors products with pinpoint accuracy, and detects security flaws as soon as they emerge. Plus according to IBM, it has boosted AI ROI from 13% to 31% since 2022.
While these impressive results mostly come from pilot programs, sandbox testing, and other smaller-scale projects, they’ve sparked a shift in how business leaders view AI’s potential.
According to an IBM survey of 5,000 executives from 24 countries and 25 industries, there’s a noticeable increase in optimism around generative AI. Over three-quarters (77%) now believe AI is ready for the market, up from just 36% in 2023, and nearly two-thirds (62%) say generative AI is more of a reality than a fad.
As generative AI computing continues to push the boundaries of what’s possible in fields ranging from natural language processing to creative content generation, the demands on computing infrastructure are growing exponentially. Processing enormous datasets and training sophisticated models like large language models (LLMs) require massive computational power and an unprecedented amount of data bandwidth. IBM Research promises to accelerate this next wave of AI innovation by leveraging co-packaged optics—a technology that could change the way we think about data centers, AI performance, and energy efficiency.
The rapid growth of AI models means that training and inference workloads require more powerful chips and a robust way to move data between these chips. Traditional electronic interconnects—wires that transmit electrical signals—have long been the backbone of computing. However, even as microprocessors shrink in size and transistors become more densely packed, these electrical connections have started to hit their limits. At high speeds and large scales, electrical signals face issues like latency, energy inefficiency, and bandwidth bottlenecks, especially when dealing with the sheer volume of data required by AI models.
To meet the soaring demands of AI, new approaches are necessary to deliver faster and more energy-efficient interconnects that can handle increasingly complex computations.
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Enter Co-Packaged Optics
IBM Research is tackling this challenge head-on with a new approach called co-packaged optics. This technology integrates optical fibers directly into the chip packaging, enabling faster, higher-capacity data transfers within the heart of data centers. For years, optical fibers have been used to carry data over long distances at impressive speeds, but their potential has largely been confined to the outside of data centers, connecting servers across vast distances. IBM’s innovation takes this capability and brings it inside the server, connecting directly to the chips themselves.
The Chiplet and Advanced Packaging team at IBM Research is working to optimize chip communication systems through co-packaged optics, a novel approach designed to enhance the efficiency and density of data transfer within and between chips.
A key challenge in integrating optical connections into integrated circuit boards is incorporating transmitters and photodetectors that can send and receive optical signals.
Optical fibers, about 250 microns in diameter—roughly three times the width of a human hair—are essential for this task. While individually small, multiple fibers quickly occupy valuable space at the edges of a chip, which can limit their scalability.
IBM Research has tackled this challenge with a next-generation solution: polymer optical waveguides.
These advanced waveguides enable the precise alignment of high-density bundles of optical fibers directly at the chip’s edge, facilitating efficient communication through the polymer fibers. Achieving high-fidelity optical connections requires extremely tight tolerances—less than half a micron between fibers and connectors—something the team has successfully mastered.
Thanks to this innovation, IBM has demonstrated the potential for a 50-micron pitch in optical channels, coupled with silicon photonics waveguides and pluggable connectors that link to single-mode glass fiber (SMF) arrays. This new design marks an 80% reduction in size compared to traditional 250-micron pitches. Testing suggests even further miniaturization is possible, potentially shrinking the pitch to just 20 or 25 microns, which could result in a staggering 1,000% to 1,200% increase in bandwidth.
Co-packaged optics could be the solution to the AI computing bottleneck. This approach works by embedding optical interconnects directly into the packaging around the chip, drastically reducing the need for traditional electrical wiring between processors. By using light-based signals rather than electrical ones, co-packaged optics have the ability to carry vastly more data at much faster speeds—while consuming significantly less power.
The Role of Polymer Optical Waveguides
One of the key breakthroughs IBM has achieved is the development of the polymer optical waveguide, the first of its kind. This waveguide is made from polymer-based materials, which are not only more energy-efficient but also allow for greater flexibility in terms of design and scalability. When integrated into the chip package, these waveguides act as the “highways” for optical signals, enabling much higher bandwidth at the chip edge than previously possible. According to IBM, this innovation increases the “beachfront density”—the number of optical fibers that can be connected at the chip’s edge—by a factor of six.
This dramatic improvement in beachfront density is crucial for generative AI computing workloads, where bandwidth is a critical limiting factor. By increasing the amount of data that can be transferred between processors, co-packaged optics enable AI models to be trained faster and more efficiently.
Energy Efficiency: A Game Changer for Data Centers
Perhaps the most exciting aspect of co-packaged optics is its potential to drastically improve energy efficiency in data centers.
AI workloads, particularly those involving large-scale model training, are known to consume enormous amounts of power. The conventional electrical interconnects used in traditional chip designs are power-hungry and inefficient, especially as the scale of the AI models continues to grow.
By switching to optical interconnects, IBM’s new technology promises to reduce energy consumption for training large AI models, which could be a game changer for data centers. Early results suggest that co-packaged optics could lead to a significant reduction in energy costs, making AI-driven applications more sustainable without sacrificing performance. With AI applications demanding higher speeds and greater efficiency, this shift toward optical interconnects could pave the way for more scalable and eco-friendly AI infrastructure.
Accelerating Generative AI
As AI applications become increasingly complex, the need for more powerful and efficient hardware will only grow. Co-packaged optics offer a way to keep pace with these demands. By providing higher bandwidth, lower latency, and significantly better energy efficiency, this innovation helps future-proof the infrastructure that underpins AI technologies.
For generative AI, which requires massive data throughput to process and generate content, co-packaged optics could be the key to faster model training, real-time inference, and more efficient operations in data centers. With AI research and development accelerating globally, it’s clear that innovations like co-packaged optics will be crucial in meeting the computational needs of tomorrow’s AI systems.
A New Era of AI Computing
IBM’s breakthrough in co-packaged optics marks an important step forward in the ongoing race to optimize AI infrastructure. By solving key limitations in traditional chip communication, this new technology has the potential to reshape data centers and accelerate the capabilities of generative AI systems. As the demand for more sophisticated AI models continues to grow, co-packaged optics could be the critical enabler for delivering faster, more efficient, and more sustainable computing at scale.
With this technology, IBM is not just advancing chip packaging—it’s helping to redefine what’s possible in the realm of artificial intelligence.
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