Demand for copper cables in AI data centers is expanding rapidly, and AEC penetration will continue to rise in 2026-2027
AI summary card
Demand for copper cables in AI data centers is expanding rapidly, and AEC penetration will continue to rise in 2026-2027
Nomura's expert call believes the high-speed copper cable market could grow from about US$5 billion in 2026 to US$60-70 billion in 2027, while interconnect solutions from NVIDIA and overseas CSPs will drive changes in the competitive landscape for AEC, DAC, optical modules, and DSPs.
- NVIDIA Rubin platform's NVL72 and NVL144 are still expected to use DAC inside the rack, consistent with the GB300 solution.
- AWS Trainium uses AEC in scale-up and the first layer of scale-out; Google's next-generation 1.6T TPU may introduce AEC or optical modules due to DAC length limitations.
- Experts expect the global high-speed copper cable market to be about US$5 billion in 2026, with AEC accounting for about 35%; the market may grow to US$60-70 billion in 2027, with AEC accounting for about 40%.
- The price of 400G AEC is about US$180-200 per unit, and 800G AEC is about US$450-500 per unit, both expected to remain stable in 2026 versus 2025.
- The high-end DSP market is currently dominated by Marvell and Broadcom, with a combined share of over 90%; Maxlinear and Credo may gain opportunities among second- and third-tier optical module customers.
Report interpretation
Overview
This report is a summary of Nomura's 66th AI expert call in the Global AI Trend Tracker series, focusing on high-speed copper cable solutions in AI data center networking. The expert discussed application paths, market size, demand structure, and the competitive landscape for NVIDIA and overseas CSPs in DAC, AEC, optical modules, CPC, and DSPs.
Core views
The core view is that rising interconnect demand within AI data centers and across racks will drive a significant expansion of the high-speed copper cable market in 2026-2027. NVIDIA Rubin will remain mainly DAC-based inside the rack, while CSPs such as AWS, Google, and Meta will adopt a combination of AEC, DAC, or optical modules at different network layers. AEC penetration is expected to increase as speeds rise and transmission distance constraints tighten, but standard pluggable optical modules used together with AEC/DAC remain the current mainstream.
Analysis framework
The report mainly uses expert interviews and supply-chain research, breaking down market size, product pricing, technology roadmaps, and the DSP competitive landscape around interconnect architectures of different CSPs and chip platforms.
Methodology notes
Obtain views on AI data center networking solutions and demand through expert interviews with high-speed copper cable companies.
This method is suitable for quickly tracking changes in technology roadmaps and order demand, but its conclusions depend on the expert sample and need to be validated with subsequent CSP capex, platform mass-production schedules, and supply-chain orders.
Estimate product opportunities using the total high-speed copper cable market size and AEC share.
Experts estimate the high-speed copper cable market at about US$5 billion in 2026 and US$60-70 billion in 2027, with AEC accounting for about 35%-40%.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- NVIDIA CORP (NVDA US)An important driver of AI platform architecture and copper cable demand
- Strengths
- The Rubin platform's NVL72 and NVL144 continue to use DAC solutions inside the rack, helping sustain demand for high-speed copper cables.
- Weaknesses
- The report does not provide an NVIDIA-specific rating, financial impact, or target price.
- Comparison
- Compared with self-developed chip solutions from overseas CSPs, NVIDIA's solution still leans toward DAC for in-rack connections.
- Risks
- If platform architecture changes or optical interconnect substitution happens faster than expected, the demand path for copper cables could change.
- META PLATFORMS INC (META US)Overseas CSP demand-side player
- Strengths
- Demand for 800G AEC could reach about 3 million units in 2027.
- Weaknesses
- It currently mainly uses optical modules, with only limited AEC usage in GB300 rack scale-out.
- Comparison
- Compared with the AWS Trainium solution, Meta's adoption of AEC is more limited.
- Risks
- If Meta's network architecture continues to favor optical modules, AEC demand may fall short of expert expectations.
- ORACLE CORP (ORCL US)Overseas CSP demand-side player
- Strengths
- Combined AEC demand with xAI could reach about 1.5-2 million units in 2027.
- Weaknesses
- The report does not provide Oracle-only demand breakdown or supply-chain details.
- Comparison
- Demand scale is lower than the Meta 800G AEC demand mentioned in the report.
- Risks
- Changes in AI cluster buildout pace and vendor selection could affect actual procurement.
- MAXLINEAR INC (MXL US)Potential beneficiary among smaller DSP vendors
- Strengths
- It may gain opportunities among second- or third-tier optical module customers.
- Weaknesses
- The high-end DSP market is currently dominated by Marvell and Broadcom, whose combined share exceeds 90%.
- Comparison
- Compared with Marvell and Broadcom, Maxlinear has a weaker share in the mainstream high-end DSP market.
- Risks
- If high-end customers continue to concentrate procurement on leading DSP vendors, opportunities for smaller vendors may remain limited.
Key data
- Global high-speed copper cable market size in 2026about US$5 billionExperts expect AEC to account for about 35%.
- Global high-speed copper cable market size in 2027about US$60-70 billionExperts expect AEC to account for about 40%.
- Meta 2027 demand for 800G AECabout 3 million unitsBased on expert estimates.
- xAI and Oracle 2027 AEC demandabout 1.5-2 million units combinedThe report text states combined demand from xAI and Oracle.
- 400G AEC priceUS$180-200 per unitExpected to remain stable in 2026 versus 2025.
- 800G AEC priceUS$450-500 per unitExpected to remain stable in 2026 versus 2025.
- High-end DSP market shareMarvell and Broadcom combined exceed 90%Marvell has the largest share in 800G DSPs, while Broadcom may have caught up in 1.6T DSPs.
Impact & implications
If the expert's view plays out, AI network interconnects will shift away from a single optical-module logic toward combined competition among DAC, AEC, CPC, LPO/NPO, and DSPs. Beneficiary areas include high-speed copper cables, AEC control chips, DSPs, optical modules, and the AI server interconnect supply chain; however, differences in CSP architectures are significant, and certainty around any single technology path still requires validation through platform mass production and orders.
Risks
- The expert interview sample is limited, and judgments on market size and penetration require follow-up validation through orders and shipments.
- Changes in AI platform mass-production schedules, CSP capex, and network architecture choices may alter AEC/DAC demand.
- The development of substitute or complementary technologies such as optical modules, CPC, and LPO/NPO may affect the addressable market for high-speed copper cables.
- DSP market concentration is high, and certainty is insufficient regarding smaller vendors gaining share.
- Most related companies in the report are Not rated, lacking support from formal earnings forecasts, valuation, and target prices.
What to watch
- Interconnect solutions inside the rack and for scale-out in NVIDIA Rubin, GB300, and subsequent platforms.
- Actual procurement mix of AEC, DAC, and optical modules by AWS Trainium, Google TPU, and Meta AI clusters.
- AEC shipment volume, price stability, and the upgrade pace of 800G/1.6T in 2026-2027.
- Changes in Marvell's and Broadcom's share in 1.6T DSPs, as well as breakthroughs by Maxlinear and Credo among second- and third-tier customers.
- Commercial progress of CPC, NPO, LPO, and standard pluggable optical module solutions.