North American data center operators are facing an increasingly sharp contradiction: AI computing clusters are growing exponentially, but power supply growth is nowhere near keeping up. Against this backdrop, optical module power optimization is no longer a “nice-to-have” technical option. It is a hard constraint on whether a data center can continue to scale.
LPO technology is emerging as a key path to resolving this contradiction. By removing the DSP chip from the optical module, LPO optimizes both power consumption and performance. Take the 800G LPO modules from leading vendors: power consumption is reduced by 50%, and they have already won volume orders from top customers such as Meta and Amazon. LPO modules are expected to account for 15% of revenue, making them an important growth driver in the optical module market.
This trend was confirmed by product launches in 2026. In February 2026, Cisco released 800G LPO modules for its Nexus 9000 series switches, while Adtran introduced the LiteWave800 ultra-low-power 800G DR8 LPO module, designed specifically for the power, latency, thermal, and bandwidth demands of modern AI and machine learning workloads. HGTECH’s 800G LPO series has already been delivered at volume to leading North American customers, with order volumes continuing to rise.
But LPO is not without challenges. LPO modules require deep adaptation with switch ports, placing higher demands on system-level interoperability. Cisco has also noted that LPO is not a universal solution, but rather plays a strategic role in AI networks. This means that when buyers select LPO products, they need to focus on whether the supplier has validated compatibility with mainstream switch platforms.
At the same time, liquid cooling adoption is accelerating. As 1.6T OSFP224 modules reach 40 to 45 watts per module, traditional air cooling is approaching its physical limits. Arista’s XPO solution integrates a liquid-cooling cold plate to support more than 400 watts of power and delivers 204.8 Tbps of switching capacity within one Open Rack Unit, achieving a fourfold increase in front-panel density compared with existing OSFP standards. The co-design of liquid cooling and low-power optical modules is becoming the standard architecture for next-generation data centers.
For procurement decision-makers at North American data centers, now is the best time to evaluate LPO solutions. In a market where electricity costs continue to climb, choosing an optical module product with excellent power optimization can not only lower PUE metrics but also preserve valuable power budget headroom for future computing expansion.
