Morgan Stanley: CPO won’t arrive that soon; copper cables can still last for two more years.

Deep Tide TechFlow message, according to Chaoxiang Research, a Morgan Stanley report dated July 13 states that the large-scale adoption of CPO in the Scale-Up network is expected in 2029 and beyond, with only a small initial import in 2028. Recent market concerns about CPO’s “delay” are overblown; the core reason is that CPO involves rebuilding the supply chain for packaging, optical engines, and laser components, and Nvidia’s Feynman generation is the time anchor for when CPO is rolled out. Copper cabling relying on innovations such as PAM4 modulation, DSP, and retimers can still hold on for two more years.

The evolution of AI cluster scale from 72 GPUs to 576 and even 1,152 GPUs is the key driver. 2026 is the starting point for the non-Nvidia Scale-Up ecosystem: AMD MI400, Amazon Trainium 3, and Microsoft Maia begin mass production, while Astera Labs and Broadcom become the main early beneficiaries. Morgan Stanley gives overweights to Nvidia, Broadcom, Astera Labs, and Keysight.