Optical networking giant, Ciena will acquire optical technology developer Nubis Communications in an all-cash transaction valued at $270 million, as the networking giant sharpens its focus on meeting soaring demand from AI-driven data centers. The deal is expected to close in Ciena’s fiscal fourth quarter of 2025.
“With the addition of Nubis, over the next 3 years Ciena should see that webscale wedge to rise significantly – if it executes as well as it usually does. The company will not be without competition in this market. The Nubis deal may motivate some vendors playing into ONLY the CPO/NPO (co-packaged optics/near-packaged optics) (e.g. Broadcom) OR electrical interconnects (e.g. Marvell) to merge or at least partner,” says Matt Walker, Chief Analyst at MTN Consulting in his Substack newsletter.
The company will also face competition in Asia, particularly from Chinese vendor, Huawei. “As the global #1 in telco network infrastructure (Telco NI), Huawei tends to go after every market niche, and this one plays directly into its goals to become a player in the AI data center market. But Ciena has some major advantages over Huawei: a strong track record of sales to R&D and government clients in North America and Europe, no political baggage, and an easier ability to work with NVIDIA and US government-funded projects given its Maryland, USA headquarters,” adds Walker.
The acquisition centers on Nubis’ technology for moving massive amounts of data inside data centers, a critical bottleneck for scaling complex AI workloads. Nubis specializes in compact, low-power optical and electrical interconnects that enable faster and more efficient communication between AI accelerators, such as GPUs.
“The explosive growth of AI-related traffic is driving unprecedented demand for scalable, high-performance connectivity inside the data center,” said David Rothenstein, Chief Strategy Officer at Ciena. “The acquisition of Nubis represents a significant step forward in our strategy to address this need. With ownership of these key technologies, we are expanding our competitive advantage.”
The Nubis portfolio complements Ciena’s existing high-speed interconnects with two key technologies designed for AI environments:
- Advanced Optical Engines: These compact modules use light (Co-Packaged Optics) for ultra-fast data transfer, supporting massive bandwidth up to 6.4 Tb/s. They are optimized for the low-latency and low-power operation essential for connecting thousands of AI chips within a system.
- High-Speed Active Copper Cables (ACC): This electrical solution allows data to travel at 200 Gb/s per lane over distances up to 4 meters, providing a low-latency way to connect AI accelerators across different racks without the cost and power consumption of more complex alternatives.
Beyond the technology, the acquisition brings over 50 engineers with deep expertise in data center connectivity into Ciena’s research and development team, strengthening the company’s talent pool.
“The Nubis team is thrilled to join Ciena and enhance its industry-leading portfolio with our breakthrough interconnect technologies,” said Dan Harding, CEO of Nubis. “Together, we will advance Ciena’s data center strategy by delivering reliable, high-quality solutions to support the next generation of AI workloads.”
Founded in 2020 by Peter Winzer, a former Nokia Bell Labs veteran, Nubis has attracted investment from Ericsson Ventures, TDK Ventures, and Matrix Partners. The company has worked with Ericsson to test co-packaged optics for next-generation RAN deployments.
Ciena’s bet on Nubis underscores the intensifying race among networking players to capture AI infrastructure opportunities, as hyperscalers and enterprises alike seek faster, denser, and more energy-efficient ways to connect compute resources inside data centers.
