Silicon photonics and co-packaged optics (CPO) are revolutionizing AI compute networks by addressing the growing demands for performance, scale, reliability, and efficiency in AI training and inference clusters. With the increasing scale of AI models and datasets, traditional GPU interconnect networks are being redesigned to improve energy efficiency and reduce signal loss. CPO technology, used in NVIDIA's Quantum-X Photonics InfiniBand and Spectrum-X Photonics Ethernet switches, integrates optical components directly with the switch ASIC, enhancing power efficiency, reliability, and latency while simplifying deployment and reducing potential failure points. Lambda plans to leverage CPO networking in its next-generation GPU clusters, such as the NVIDIA GB300 NVL72 and NVIDIA Vera Rubin NVL144, to provide high-bandwidth, low-latency, and reliable interconnects, streamline deployment, and improve overall cluster efficiency. This shift is crucial for managing the expanding scale and throughput demands of AI workloads, as it ensures that Lambda's infrastructure can support large training runs and distributed inference effectively.