The race to capitalize on artificial intelligence (AI) is moving beyond GPUs and semiconductor giants, with ETF issuers increasingly turning their attention to photonics — a technology many industry experts believe will play a critical role in the next phase of AI infrastructure.
GraniteShares has become the latest asset manager to embrace the trend, filing with the SEC for the Speed of Light AI ETF last week. While the filing offers little detail on the fund’s strategy, holdings, or launch timeline, its name points squarely toward photonics, the science of transmitting and processing information using light rather than electrical signals.
The filing arrives just days after Tuttle Capital Management launched the Tuttle Capital Pure Play Photonics ETF (BATS:FOTO), one of the first ETFs dedicated specifically to the photonics ecosystem. Together, the two developments suggest that photonics is rapidly emerging as a standalone investment theme within the ETF industry, much as semiconductors, cybersecurity, and AI software did in previous years.
From AI Compute To AI Connectivity
For much of the AI boom, investors focused on companies supplying the computing power needed to train and run large language models. However, as hyperscalers pour hundreds of billions of dollars into AI infrastructure, attention is increasingly shifting toward another challenge: moving enormous volumes of data efficiently between chips, servers, and data centers.
Photonics technologies use lasers, optical transceivers, and fiber-optic networks to transmit data at higher speeds while consuming less energy than traditional electrical connections. Industry executives increasingly view optical networking as a key solution to growing bottlenecks around power consumption, heat generation, and bandwidth.
That thesis has been gaining support from major technology companies.
Why ETF Issuers Are Taking Notice
Several recent developments have strengthened the case for photonics-focused investment products:
- Nvidia Corp (NASDAQ:NVDA) has integrated co-packaged optics into its Blackwell platform to improve chip-to-chip communications.
- Amazon.com Inc’s (NASDAQ:AMZN) AWS has disclosed the use of photonic I/O in its Trainium2 AI processors.
- Alphabet Inc (NASDAQ:GOOGL) said its Jupiter network has deployed more than one million optical transceiver ports.
- Microsoft Corp (NASDAQ:MSFT) has highlighted optical networking as part of its long-term AI infrastructure investments.
- Semiconductor manufacturers are expanding silicon photonics production capacity to meet expected demand.
Meanwhile, Tuttle Capital’s FOTO ETF was launched specifically to target companies involved in lasers, silicon photonics, optical transceivers, specialty wafers, and photonics manufacturing equipment, signaling growing confidence that the industry is large enough to support dedicated investment products.
A New Frontier For AI-Themed ETFs
Unlike many AI-themed ETFs that largely hold familiar mega-cap technology names, photonics-focused funds aim to provide exposure to a less crowded segment of the AI supply chain. The universe of publicly traded photonics companies remains relatively small, but investor interest is growing as data-transfer infrastructure becomes increasingly important to AI performance.
GraniteShares has yet to reveal exactly how its proposed Speed of Light AI ETF will be constructed. But the filing itself underscores a broader shift taking place in thematic investing: ETF issuers are beginning to look beyond AI compute and toward the optical technologies that could power the next generation of AI infrastructure.
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