Abstract: The invention provides an optical interconnect system and method for a data center. A nonlinear differential precoding module performs nonlinear differential precoding on an inputted original signal, to obtain a precoded signal with an increased quantity of levels. A generalized Tomlinson-Harashima precoding (GTHP) module pre-equalizes the precoded signal, to obtain a pre-equalized signal with scattered distribution. A faster than Nyquist (FTN) module performs high-frequency truncation filtering on the pre-equalized signal, to obtain a discrete signal. A signal transmission module transmits the discrete signal from a transmitting end to a receiving end. A feed-forward equalizer (FFE) performs strong equalization on the discrete signal to obtain a level slice signal, and decodes the level slice signal according to a GTHP decoding table, to obtain a decoded signal.