Nvidia unveils Texas AI manufacturing upgrade with Coherent

Texas expansion

Nvidia is backing a major upgrade at Coherent's factory in Sherman, Texas, in a move that pushes its AI buildout deeper into U.S. manufacturing and optical supply chains.

The project is part of a $2 billion partnership between Nvidia and Coherent, according to reporting on the announcement. The upgraded site will make indium phosphide-based lasers used for high-speed data transfer between AI chips.

That work matters because the components sit in the fast-growing layer of AI infrastructure that helps large systems move data efficiently. Nvidia has been recasting its strategy around entire AI factory systems, not just chips, and the Texas site fits that shift.

Nvidia CEO Jensen Huang framed the effort as part of a broader industrial transformation, saying AI factories are the infrastructure of the new industrial revolution.

Jobs and investment

AP reported the project is expected to create about 1,000 jobs. That figure includes roughly 550 roles in advanced manufacturing, engineering and technical work.

The job estimate gives the project a public-policy angle as well as a supply-chain one. It ties Nvidia's AI expansion to domestic industrial capacity at a time when manufacturing, energy use and advanced technology jobs are all under close scrutiny.

Coherent CEO Jim Anderson said the company saw additional capacity growth opportunities because of strong AI demand. The comment suggests the Sherman expansion is not just a one-off buildout, but part of a wider push to meet orders tied to AI infrastructure.

The companies have not fully disclosed the funding split behind the Texas upgrade. Available reporting did not specify how much capital will come from Nvidia, how much from Coherent, or whether local incentives are part of the package.

From March deal to Texas site

The Sherman project builds on Nvidia's March 2026 agreement to invest $2 billion in Coherent as part of a broader $4 billion photonics push that also included Lumentum.

That earlier deal signaled Nvidia's interest in advanced laser and optical networking capacity as it tries to support more energy-efficient, higher-bandwidth AI systems. The Texas announcement shows how that strategy is now moving from dealmaking into factory expansion.

The June 16 unveiling was the first confirmed public report of the Texas manufacturing upgrade itself. Earlier coverage had established Nvidia's broader photonics ambitions, but not the Sherman factory details.

Why it matters

Photonic and optical components are becoming more important as AI systems require faster and more efficient movement of data inside data centers and across chips.

For Nvidia, the Coherent expansion adds a domestic manufacturing angle to its AI strategy and strengthens its access to a critical component class for future systems.

For Coherent, the project offers a path to more capacity at a time when AI demand is reshaping the market for lasers and other optical hardware.

What happens next will depend on construction milestones, permitting and whether Nvidia or Coherent disclose more detail on capacity, capital spending and hiring. The exact construction start and completion dates have not been confirmed.

The announcement also leaves open how much of the employment figure will be permanent versus construction-related. Those details will matter as the project moves from promise to execution.