It also has the advantage that when they move to multi-wavelenght, its performance will greatly exceed electrical packet-switching networks.
If you think of packets like snakes going through a network, a layer 1 switching network creates tunnels for the snakes that you choose ahead of time (and can reconfigure whenever you want). A packet switched network creates tunnels that are chosen by the snakes. If you run a packet switched network, you can do everything you do with a layer 1 switched network by simply restricting which peers you send data to. On a hardware level, you need to convert from optics to electricity to do this, but you don't strictly need to do any buffering (the use of large switch buffers on Ethernet switches is because of Ethernet, not because of packet switching). Low-latency switches don't buffer unless they need to, and basically just read the header as it's coming in to choose a route for the packet.
EDR Infiniband networks could certainly handle TPU v4 levels of bandwidth in a packet-switched fashion (at the time when TPU v4 was being built and deployed), particularly when the packets are doing something as tame as going around a torus. It also gives you the flexibility to do other things, though.
It certainly raises the complexity of the system, but I assume sometime around TPU v6 or v7, Google will rediscover packet switching for inter-TPU links.
40 year old patent. But I'm thrilled to see it applied at scale to reconfigurable supercomputers.
[1] Jupiter Evolving: Transforming Google’s Datacenter Network via Optical Circuit Switches and Software-Defined Networking. https://research.google/pubs/pub51587/