The Co-Packaged Optics (CPO) module market is booming, projected to reach $21. 99 billion by 2033 with a 35% CAGR. Driven by AI, cloud computing, and data center expansion, leading companies like Broadcom and Intel are shaping this high-growth sector. According to LightCounting, sales of lasers and photonic integrated circuits for optical transceivers are expected to grow from $2. 9B by 2029, fueled largely by AI data centers. Read on to learn key CPO trends shaping AI systems in 2026 and the challenges designers will need to. Co-Packaged Optics (CPO) is an advanced optical interconnect architecture that integrates optical components—such as photonic integrated circuits (PICs) and lasers—directly alongside switching ASICs or processors within the same package. Unlike traditional pluggable models, CPO integrates optical modules directly onto the switch ASIC substrate, reducing electrical reach and effectively addressing signal integrity issues. This approach has gained traction. Co-Packaged Optics Module (CPO) by Application (Ethernet Switches, Machine Learning, Other), by Types (100G, 400G, Other), by North America (United States, Canada, Mexico), by South America (Brazil, Argentina, Rest of South America), by Europe (United Kingdom, Germany, France, Italy, Spain, Russia. The Co-Packaged Optics Market Report is Segmented by Data Rate (Below 1. 4 T and Above), Component (Optical Engine, Electrical IC, Laser Source, and More), Integration Approach (On-Board Optics, and Co-Packaged Optics), End-Use Application (Hyperscale Cloud Data Centers.