AMD’s Photonics Play: How the Enosemi Buy Supercharges Its AI Ambitions

The $2.5 Trillion AI Race Just Got a Silicon Valley Upgrade

On May 28, 2025, AMD made a decisive move in the AI hardware arms race by acquiring Enosemi, a Silicon Valley startup specializing in photonic integrated circuits. The deal—terms undisclosed—signals AMD’s bet on co-packaged optics (CPO) as the next frontier for AI infrastructure. With data centers hitting power and bandwidth walls, this acquisition could redefine how AI systems communicate.

“Enosemi’s team has cracked the code on scaling photonics for mass production,” says an AMD insider. “Their IP lets us push light-based interconnects into the mainstream.”

Enosemi’s 45-person team, stacked with PhDs from Stanford and MIT, brings a rare blend of photonics expertise and semiconductor manufacturing know-how. Their tech replaces copper wires with light-based connections, offering 10x the bandwidth density at half the power—a critical advantage for AI workloads. AMD’s CTO Mark Papermaster has called CPO “the only viable path” for next-gen AI clusters.

Full-Stack Domination

This isn’t AMD’s first rodeo. Since 2022, the company has aggressively expanded its AI toolkit: Xilinx’s adaptive AI Engines, Pensando’s smart networking, Silo AI’s algorithms, Mipsology’s inference software, and ZT Systems’ rack-scale designs. The Enosemi deal fills the last missing piece—photonics—completing a vertical stack from silicon to systems.

“You can’t win AI with just GPUs anymore,” notes industry analyst Patrick Moorhead. “AMD now controls every layer, from compute to photons.”

The numbers tell the story. Traditional electrical interconnects consume 30% of a data center’s power budget just moving data. Enosemi’s CPO tech slashes that overhead, potentially saving megawatts per AI training run. For hyperscalers like Microsoft and Meta—AMD’s top clients—this could mean billions in operational savings.

The Silicon Photonics Endgame

AMD’s roadmap now clearly points toward photonics-first architectures. By 2026, analysts expect CPO to handle 80% of chip-to-chip links in AI accelerators. Enosemi’s patents in 3D-stacked optical engines give AMD a leg up against rivals like NVIDIA’s NVLink and Intel’s Ponte Vecchio.

But the real prize? Democratizing photonics. Enosemi’s manufacturing breakthroughs could make light-based interconnects cost-competitive with copper by 2027—turbocharging everything from edge AI to quantum computing. As AMD CEO Lisa Su often says: “In AI, the bottleneck is always moving. Our job is to stay ahead of it.” With this acquisition, they just might.