The $10T AI Buildout Has a Photonics Problem

Molly O'Shea (0:00)

Welcome to Sourcery.

Herwig Van Hove (0:10)

The potential of photonics.

Yannick De Koninck (0:12)

The technology to interconnect these GPUs. Global payroll and HR platform.

Herwig Van Hove (0:16)

8 billion operational data points.

Yannick De Koninck (0:18)

Scale-ups over startups.

Herwig Van Hove (0:20)

You'd rather have a million of something than one of anything.

Yannick De Koninck (0:22)

Building the intelligence layer through the fence. There isn't enough power, there's not enough memory chips. We're at the end of physics, of what we can still do.

Molly O'Shea (0:41)

Yannick and Herwig, welcome to Sourcery End Strikes Annual Gala.

We're here in Monaco and we're going to go deep into photonics and what you're building with Thema. But before we get into that, we're going to go into a long conversation on photonics. So Yannick, I'd love to start with your background and then Herwig, we'll get into yours. How did you get into photonics?

Yannick De Koninck (1:05)

So I was one of these nerdy kids who locked himself up in his bedroom playing Lego all day. So naturally I went to engineering school and I was 20 years ago. And back then, Silicon Photonics was this niche, upcoming branch in engineering with no prospect for any job at all. So I decided to jump on that ship. I did make my PhD in that field. And then by that time, I had the opportunity to move to San Diego to join a startup company there that was trying to commercialize Silicon Photonics, one of the first companies to do that and to successfully do that. I moved back to IMEQ where I worked on laser integration for Silicon Photonics for a while. And then five years ago, I joined Nvidia. Back then, when I still had to explain to people what Nvidia actually was.

And so we started from scratch, built the Silicon Photonics technology there into a product ready majority.

And now I'm starting at Thema.

Molly O'Shea (2:16)

Herwig, how did you get involved?

Herwig Van Hove (2:18)

So I've been an investor most of my life, turned operator very late.

But I've been focused on deep tech for quite a while, and so got involved in the fascinating world of photonics almost a decade ago and realized three, four years ago that the train was leaving the station and there were some gaping holes in the supply chain. And that is what we're trying to solve with Thema, realizing that this visionary choice of Yannick 20 years ago to study the field of silicon photonics was something that has put Belgium on the map and has created a talent base that's broad and deep. And I've spent my life selecting, honing and nurturing talent. And so that's what we're going to hope and do with this.

Molly O'Shea (3:13)

So let's lay out the state of the market and how chips have gotten to this point, why copper is going out of date and why there's a focus on photonics and lasers. Can you explain a little bit of that and also why Europe?

Herwig Van Hove (3:30)

So I think the market is the part that really dragged me into it.

We saw a much bigger opportunity than what most people in the field were seeing. That was because we were talking to the CTOs of data centers and realized indeed what their need was and how photonics could help solve this. And we were listening very carefully when some of the gurus of the ecosystem like Andy Bechtelsheim were quoting numbers that far exceeded what even the most optimistic analysts were saying. And we felt that they were very well informed. And so that's what pushed us to do this.

Yannick De Koninck (4:19)

And to answer your question about where we are today, so if you think about AI, you think about GPUs, right? You think about these compute engines that actually run the models. But the models have gotten so large that they no longer fit on a single GPU. So what we need to do is we need to interconnect multiple GPUs together to run these models. Traditionally that's been copper interconnects, but as these GPUs get faster, they need more data, they need more data at a faster rate and copper is running out of steam. And that's why we're transitioning to optical interconnects, which can bring much higher data transfer bandwidths.

So yeah, that's where...

Molly O'Shea (5:03)

So I recently interviewed Tony Kim of BlackRock in Paris at the Raise AI Summit and we were breaking down the entire industry. He says there's a $10 trillion rebuild that's happening. And one of the most affected and going to be the most effective places for that spend is in these data centers because the current old infrastructure of a data center is not built for AI. It's completely inefficient.