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- 3M CEO Bill Brown said its optical connectivity technology can cut fiber installation time by up to 85% as hyperscalers build AI data centers.
- He said the business could grow four to five times over the next several years as the industry shifts from copper to fiber-optic networking.
watch nowVIDEO02:513M CEO talks Microsoft data centers partnershipMad Money with Jim Cramer
The industrial conglomerate best known for Post-it notes and Scotch tape has found an unlikely role in the artificial intelligence buildout.
3M has developed a technology called expanded beam optical connectivity that helps hyperscalers deploy fiber-optic networks faster as more demanding AI workloads drive the shift away from traditional copper networking.
“It saves 85% of the installation time for hyperscalers,” Brown said on CNBC’s “Mad Money” Tuesday. “Time is money for hyperscalers.”
Unlike traditional point-to-point fiber connections, 3M’s technology spreads light across a wider surface before reconnecting it, making the connections more resistant to dust and vibrations that can disrupt data transmission. Brown said the company has built a significant competitive advantage, with “100 patents in the space and another 50 pending.”
The technology recently cleared an important milestone after Microsoft certified it for use in its Azure data centers following several years of testing. Brown said 3M is also conducting trials with other hyperscalers while expanding manufacturing capacity. Cramer’s Charitable Trust, the portfolio run by CNBC’s Investing Club, owns shares of Microsoft.
“So we’re building a business here,” Brown said. “I’m really excited.”
The expanded beam optical connectivity business remains a relatively small part of 3M’s overall business. Wall Street expects the company as a whole to generate roughly $25 billion in annual sales this year. During the company’s earnings call Tuesday, Brown said the technology is expected to bring in $40 million to $50 million in revenue this year, but could reach up to five times that amount over the next several years as hyperscalers increasingly move to fiber-optic networking.
On the earnings call, Brown estimated the total addressable market for expanded beam optical technology is roughly $1 billion this year and could expand to about $2 billion by 2028. To meet growing demand, 3M plans to double production capacity this year and double it again over the following 12 to 18 months. Even then, he said, the company expects to rely on contract manufacturers and a broader ecosystem of suppliers to keep pace with demand.
watch nowVIDEO09:273M CEO Bill Brown goes one-on-one with Jim CramerMad Money with Jim Cramer
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