Deep|LITE: At the Center of the Optical Communications Revolution
The Name That Benefits the Most From the TPU
Over the past two months, we’ve discussed how TPU remain highly constrained—demand far outstrips supply—even as volumes rise, and how over the next year they could help Google’s GCP accelerate to 45% year-over-year growth. Beyond Google, we’ve also covered TPU-related names and provided a detailed analysis of OCS.
Simply put, within the coming TPU tailwind, Optics has the largest incremental upside, and within Optics the best ticker is LITE. We’ve already offered in-depth analyses of OCS and the 3D Torus in prior articles; you can click the link below to read more.
As competition in LLMs sees algorithms and data capabilities converge, compute infrastructure has become the key moat determining AI supremacy. In this race, Google’s unique TPU + OCS + 3D Torus hybrid architecture provides a decisive advantage over competitors in scalability, cost, and performance. Optical communications technology is the “hidden champion” in Google’s compute architecture, with OCS and its related optical transceiver supply chain set to benefit most. We expect Lumentum to be one of the biggest winners from Google’s rapid AI infrastructure expansion.
Google’s Compute Moat: TPU, OCS, and 3D Tor
While OpenAI and Anthropic excel in specific applications, Google’s unique hardware architecture positions it to achieve comprehensive model leadership with Gemini 3 by year-end. Google once lagged in algorithms and data strategy. However, these barriers are now eroding as talents return and industry knowledge converges. This makes compute the decisive differentiating factor. Google’s compute advantage stems from its TPU + OCS + 3D Torus architecture.
3D Torus
This is a high performance computing topology that connects nodes (TPUs) in a three-dimensional torus grid. This design eliminates the need for central switches, providing low latency and robust network performance. Amazon’s Trainium2 chip also adopts a 3D Torus architecture, validating the viability of this approach.
Illustration of 3D Torus Networking
