Roundhill Investments Launches AI Photonics and Optics ETF

Roundhill Investments is launching the Roundhill Photonics and Optics ETF (LYTE) on Thursday to target a specific niche in AI infrastructure. The fund focuses on technologies that use light pulses for data transmission instead of electrical signals, aiming to bypass the physical limitations of copper wiring to create faster, more energy-efficient networking for AI data centers.

This launch follows the success of the firm's Memory ETF (DRAM), which has attracted tens of billions of dollars since April. Roundhill enters a competitive landscape already occupied by Tema ETFs, which introduced the LAZR Photonics & Optics ETF on June 30.

The move aligns with significant industry shifts, including Nvidia's investment of at least $6.5 billion in photonics companies since March and its plan to release the photonics-based Feynman microarchitecture in 2028. This growth is further highlighted by Goldman Sachs projections, which estimate the optical networking market will expand from $15 billion in 2026 to $154 billion by 2028.