The conglomerate best known for Post-its and Scotch tape has played an unexpected role in building artificial intelligence.
3M has developed a technology called Extended Beam Optical Connectivity that enables hyperscalers to deploy fiber-optic networks more quickly as demanding AI workloads drive migration away from traditional copper networks.
“This saves 85% in hyperscaler installation time,” Brown said on CNBC’s “Mad Money” on Tuesday. “For hyperscalers, time is money.”
Unlike traditional point-to-point fiber connections, 3M’s technology spreads the light over a larger surface before reconnecting, making the connection more resistant to dust and vibrations that can disrupt data transmission. Brown said the company has “100 patents in this area and 50 more pending,” giving it a significant competitive advantage.
The technology recently passed an important milestone. microsoft After several years of testing, it has been certified for use in Azure datacenters. Brown said 3M is also testing other hyperscalers as it expands manufacturing capacity. Cramer’s Charitable Trust, a portfolio managed by CNBC’s investment club, owns Microsoft stock.
“That’s why we’re building a business here,” Brown said. “I’m really excited.”
Extended beam optical connectivity remains a relatively small part of 3M’s overall business. Wall Street expects the company’s overall annual sales to be about $25 billion this year. During the company’s earnings call on Tuesday, Brown said the technology is expected to bring in $40 million to $50 million in revenue this year, but that number could increase by up to five times over the next few years as hyperscalers move toward fiber-optic networking.
In an earnings call, Brown estimated that the target market for expanded beam optical technology is about $1 billion this year, and could grow to about $2 billion by 2028. To meet growing demand, 3M plans to double its production capacity this year and double again over the next 12 to 18 months. Still, he said the company expects to rely on a broader ecosystem of contract manufacturers and suppliers to meet demand.
