Aluminium Nitride (AlN) is proposed as a dual function optical cladding and thermal spreading layer for hybrid ridge lasers, replacing current benzocyclobutene (BCB) encapsulation. A high thermal conductivity material placed in intimate contact with the Multi-Quantum Well active region of the laser allows rapid heat removal at source but places a number of constraints on material selection. AlN is considered the most suitable due to its high thermal conductivity when deposited at low deposition temperatures, similar co-efficient of thermal expansion to InP, its suitable refractive index and its dielectric nature. We have previously simulated the possible reduction in the thermal resistance of a hybrid ridge laser by replacing the BCB cladding material with a material of higher thermal conductivity of up to 319 W/mK. Towards this goal, we demonstrate AlN thin-films deposited by reactive DC magnetron sputtering on InP.