3M's expanded beam optical tech saves 85% installation time for data centers and won Microsoft Azure certification. CEO sees revenue reaching 5x current levels.
3M, the industrial conglomerate known for Post-it notes and Scotch tape, has carved out an unexpected niche in the artificial intelligence buildout. The company's expanded beam optical connectivity technology helps hyperscale data centers deploy fiber-optic networks faster as AI workloads push the industry away from traditional copper cabling.
The technology spreads light across a wider surface before reconnecting it, making connections more resistant to dust and vibrations that can disrupt data transmission. CEO Bill Brown said on CNBC's "Mad Money" Tuesday that the approach saves "85% of the installation time for hyperscalers." He added that 3M holds "100 patents in the space and another 50 pending."
The technology recently cleared a key milestone. Microsoft certified it for use in Azure data centers after several years of testing. Brown said 3M is running trials with other hyperscalers and expanding manufacturing capacity.
"So we're building a business here," Brown said. "I'm really excited."
The optical connectivity business remains a small piece of 3M's overall revenue. Wall Street expects the company to generate roughly $25 billion in sales this year. On the company's earnings call Tuesday, Brown said the technology is on track to bring in $40 million to $50 million in revenue this year. He projected that figure could reach up to five times that amount over the next several years as hyperscalers shift to fiber-optic networking.
Brown estimated the total addressable market for expanded beam optical technology at roughly $1 billion this year. He said it could expand to about $2 billion by 2028. To meet demand, 3M plans to double production capacity this year and double it again over the following 12 to 18 months. Even then, Brown said, the company expects to rely on contract manufacturers and a broader ecosystem of suppliers to keep pace.
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