CPO Kills AI Supply Chain After playing all day today, silly brother shared with everyone some investment notes he learned about Serenity a few days ago: Let's first read Lao Huang's original words: CPO is not an 'optional enhancement' - it is a 'structural necessity' for AI data centers. A million GPU cluster must use CPO, otherwise it is physically impossible CPO is a major trend in AI supply chain: Simply put, CPO is co encapsulated optics. The current solution is to first connect a long copper wire to an external optical module, and then connect the AI chip to an optical fiber. The conversion of electricity to light relies entirely on external modules, which consumes electricity and occupies space. The future CPO black technology is to directly plug the optical engine next to the AI chip, with a distance of only a few millimeters. Both Nvidia and Marvel are pushing this technology to the death, and it is expected to be commercially available on a large scale by 2027 to 2028. Why CPO is disruptive, just look at these four core numbers to understand. Firstly, the power consumption is reduced by 3.5 times. If one million GPUs are used with traditional optical modules, the optical network would consume 180 megawatts of electricity, which can be directly compressed to 50 megawatts with CPO. Secondly, the bandwidth can soar by a hundred times. Furthermore, the network reliability has increased tenfold. Finally, the market is a big cake, with a market size of up to 20 billion US dollars by 2036. CPO's supply chain has 5 bottleneck points: 1. Substrate → Who makes it? AXTI, SOI (monopoly) 2. Light Source → Who does it? SIVE、AAOI、POET 3. Optical Engine → Marvel, Coherent 4. Testing → AEHR 5. ASIC → NVDA, Marvel, Broadcom Strategy Review: 1. Small cap stocks are easily memed, forming a harvesting chain similar to the cryptocurrency market 2. All the targets are betting on the same story, which is too concentrated. If the commercial use of CPO is hindered, it will completely collapse. 3. Currently, it appears that the returns are very high.