NVIDIA's CEO has stated that over the next 5-10 years, data center connectivity solutions will utilize significant amounts of copper alongside extensive optical components.

In premarket trading on June 2, shares of data infrastructure company Marvell Technology (MRVL.O) surged more than 27%. The company's market capitalization stood at $192 billion at the prior day's close.

This movement follows comments made during the COMPUTEX event in Taipei. In a discussion with Marvell's CEO Matt Murphy, NVIDIA's CEO suggested that Marvell could potentially become the next company to reach a trillion-dollar market valuation.

During his presentation at COMPUTEX on June 2, Matt Murphy outlined the three primary bottlenecks in AI infrastructure. The first is computational power, a domain where NVIDIA has become the first company to surpass a $5 trillion market cap. In the memory sector, three trillion-dollar companies have recently emerged. The next bottleneck lies in connectivity, which will determine the limits of infrastructure, a challenge the entire industry must collaborate to solve.

Following this, Murphy invited NVIDIA's CEO to the stage for a conversation. The NVIDIA leader stated that the era of "useful AI" has arrived, with surging demand driving a corresponding spike in demand for Marvell's products. He explained that the computing model for AI agents is distributed, requiring computational problems to be broken down and processed across data centers, where connectivity is crucial. He noted that large cloud service providers sometimes want to design their own custom chips, and the companies are collaborating on NVLink Fusion, which can integrate NVIDIA's technology with Marvell's. He added that NVIDIA and Marvell share several common customers.

Regarding the evolution of data center connectivity solutions, the NVIDIA CEO stated in the dialogue that the industry should use copper solutions as much and for as long as possible. However, copper has limitations, such as in bandwidth and transmission distance. When these limits are reached, optical technology can be leveraged to scale up and out further. He predicted this dynamic would persist for a long time. Over the next 5-10 years, vast amounts of copper will be used, alongside a significant volume of optical components.

Marvell's business is related to AI infrastructure interconnectivity and custom chip design. The company's products include 800G and 1.6T extended optical devices, Ethernet switches, CPO optical solutions, inter-data center connectivity modules, and custom XPU business.

In late March, NVIDIA also announced a $2 billion investment in Marvell. The companies will collaborate on the rack-scale NVLink Fusion platform, with Marvell providing custom XPUs and NVLink Fusion-compatible scale-up networking solutions, while NVIDIA provides supporting elements including its Vera CPU, NVLink interconnect technology, and rack-scale AI computing.

From a performance perspective, Marvell released its Q1 FY2027 earnings report for the period ending May 2 at the end of May. Quarterly revenue was $2.418 billion, above the midpoint of guidance and up 28% year-over-year, with GAAP net income of $34.5 million. Matt Murphy stated that the company achieved record revenue for the quarter, anticipates 35% revenue growth in Q2, and accelerating full-year revenue growth. He noted they see continued strength in the data center business and excellent AI-related bookings.

Marvell's share price has shown significant gains since April. From April 1 to June 1, the company's stock price accumulated an increase of 121.65%. During the conversation with NVIDIA's CEO, Matt Murphy, when discussing NVIDIA's investment, remarked that Marvell's stock performance has been good since the investment.

Broadcom (AVGO.O), which has a business structure somewhat similar to Marvell's, has also seen strong recent stock performance. From April 1 to June 1, Broadcom's share price accumulated an increase of 48.61%. Broadcom's business also includes XPU chip customization and connectivity products. As of the close on June 1, Broadcom's market capitalization was $2.2 trillion.