As adoption of artificial intelligence continues to rise dramatically, data centers are facing increased demands to manage those workloads faster and more efficiently. The challenge, however, is that moving more data more quickly requires more power. In fact, AI data centers are poised to soak up half the growth in electricity demand in the United States between 2025 and 2030.

That increased AI workload also generates higher thermal output that can adversely affect component reliability and performance due to accelerated wear. That requires data centers to focus on improved cooling, whether by redesigning components themselves to achieve better dissipation rates or increasing power to boost HVAC cooling capacity and using alternative liquid cooling methods. In all cases, data centers face the potential of rising costs to manage their growing cooling needs.

Fortunately, technologies such as linear pluggable optics (LPO) can simplify this process while also making it more cost effective. For instance, LPO technologies can enable data centers to reduce power consumption, speed up data transmission and improve thermal performance. With the right plan and the right partners, LPO technology also can reduce the cost and overall complexity of data center architecture.

Bringing down the heat
LPO technology provides an efficient cooling option by removing one of the most power-hungry components from optical transceivers. The Digital Signal Processor (DSP) is an important component providing key functions for a stable link. A traditional DSP is used at either end of every high-speed optical link, the amount of power they use collectively adds up very quickly in typical installation.

As data transmission speeds increase, DSPs must perform more complex signal processing to maintain signal integrity over high-speed links. This leads to higher power consumption and increased heat generation. LPO offers an alternative by eliminating the need for onboard DSPs in optical transceivers. Instead, they rely on the host switch’s SerDes (serializer/deserializer) to directly drive the analog optical signal. By removing the DSP from the module, LPO can reduce the power required for high-speed optical transmission by up to 40%, making it an attractive option for power- and thermally constrained data center environments.

Challenges to LPO adoption
To adopt LPO, data centers need both host switches with a powerful and capable SerDes. Transitioning to LPO will become more possible as network equipment manufacturers build these capabilities into the SerDes.

However, successful LPO adoption requires more than swapping in host switches with an LPO-compatible SerDes. The DSP doesn’t just translate signals—it conditions them as well. In other words, a DSP ensures signal integrity functions such as equalization, pre-emphasis and forward error correction to maintain signal integrity across varying link conditions. By contrast LPO-based transceivers offload these tasks to the host which are more sensitive to channel loss, crosstalk and variability with SerDes implementations, as a result LPO links have tighter signal integrity margins.

The industry is actively in the process of developing next generation SerDes standards such as 112G and 224G PAM4 that aim to enhance electrical signal integrity and improve compatibility with emerging pluggable optics. Supporting this effort, the LPO MSA is working to define common electrical, mechanical and management interface specifications for LPO, to promote interoperability and accelerate adoption. However, ensuring reliable operation between host switch SerDes and LPO transceivers remains a critical challenge. Compatibility between switches and pluggable modules will likely be a key factor as data centers map out paths to deploy more efficient and scalable technologies.

Planning for efficiency
The rapid growth of AI and machine learning—as well as expansion of cloud computing and hyperscale data centers—puts pressure on operators to increase their capacity to handle data at higher speeds and volumes. As speed capabilities move from 400G to 800G and above, data center infrastructure must evolve to keep pace.
The connections between digital and analog signal paths offer clear areas of improvement for greater speed and efficiency. These translation points are also a source of heat generation and power consumption, which makes them an even more attractive target for upgrades as data centers scale. Unsurprisingly, data centers have expressed rising interest in solutions such as LPO and co-packaged optics (CPO) that address this area. The industry analyst group LightCounting expects penetration of LPO and CPO solutions to increase substantially between 2026 and 2030, with LPO technology making up the bulk of that early growth.

These predictions likely reflect the relative maturity of each technology. CPO solutions are still in early stages and require a series of incremental advancements on the host’s chip. LPO solutions are growing much closer to deployment.

Timing the transition
Adopting technology solutions such as LPO can accelerate data centers’ abilities to benefit from lower latency, better power efficiency and improved thermal performance, lower cost per unit. However, data centers also need to carefully manage the cost of these upgrades. They’ll also need to ensure compatibility between host hardware currently in place and any new LPO transceiver. Network equipment manufactures that produce host hardware capable of supporting LPO will likely also develop LPO transceivers, but whether those transceivers will be fully compatible with other hosts remains an open question, especially as standards continue to evolve.

The speed of the transition also depends on when compatible LPO technology becomes available for each type of switch in use. Considering third-party vendors such as Belden’s Precision Optical Technologies connected brand could help data centers move to LPO technology more quickly and effectively. By working closely with data centers to match optics with the equipment they have in place, third-party vendors allow data centers to build more flexibility into their operations to scale more efficiently and more economically.

With the shift toward switches capable of supporting LPO connections underway, now is the time for data centers to start plotting out upgrade paths that take advantage of the technology. With a wide array of switch and transceiver manufacturers on the market, maximizing compatibility could be the key to sourcing and deploying solutions more quickly, gaining near-term efficiencies while also setting the stage to support higher speeds more efficiently and cost-effectively in the future.