#United States #Redwood City #Dell'Oro Group #Ethernet #InfiniBand

Ethernet Surpassing InfiniBand in AI Networking

According to a newly released report by the Dell'Oro Group, the landscape of AI networking is undergoing a significant transformation. Ethernet switches have not only tripled their sales numbers in AI back-end networks, but they are also projected to dominate more than 66% of the data center switch market focused on AI clusters during the last quarter of 2025 and throughout the year. The report highlights a clear shift in preference towards Ethernet as companies adapt to the burgeoning demands of AI technology.

“The increased size of AI clusters, coupled with persistent supply chain challenges, necessitates a more diverse vendor environment that favors Ethernet,” explains Sameh Boujelbene, Vice President at the Dell'Oro Group. Major players like Amazon, Microsoft, Meta, Oracle, and xAI are all pivoting towards Ethernet to support their expansive cloud infrastructure. While InfiniBand maintains a steady growth trajectory, it is clear that Ethernet's rate of expansion outpaces its traditional competitor.

Competitive Animation in Ethernet Market

The market for Ethernet within AI networking remains fiercely competitive. By 2025, the top contenders will be Celestica and NVIDIA, leading the charge with a remarkable 50% combined market share. Following closely behind is Arista Networks, despite experiencing delays with parts of its AI-derived revenues. Cisco has also ramped up its efforts, expediting switch shipments tailored for AI back-end networks targeted at major hyperscale datacenters. Meanwhile, HPE/Juniper is breaking into new accounts as various new participants actively pursue opportunities in this sphere.

The increased need for vendor diversity at both the chip and system levels is expected to spur continuous share shifts within the market, making it more dynamic than ever before. As tech companies strive to optimize performance and reduce latency in AI applications, Ethernet is being viewed as a critical solution.

Market Highlights

1. 800 Gbps Dominance: The report outlines that 800 Gbps switches comprised the bulk of shipments and revenue in AI back-end networks during Q4 2025. These high-speed switches are essential for handling the intensive data processing needs of AI applications.

2. Future Innovations:** The anticipated rollout of 1600 Gbps switches in the latter half of 2026 promises an influx of revenue growth and a significant reorganization of market shares. This innovation is seen as crucial for enhancing bandwidth capabilities required by advanced AI functionalities.

A Comprehensive Overview

The Dell'Oro Group's quarterly study on Data Center Switch – AI Back-end Networks delves deeply into the dynamics of switches utilized to interconnect accelerated servers in AI environments. The report delivers exhaustive data on manufacturer revenues, shipped ports, as well as average sales prices for both Modular and Fixed Managed and Unmanaged Ethernet Switches. This spans across an extensive speed range—from below 100 Gbps up to an impressive 3.2 Tbps. Furthermore, it analyzes revenue distributions across various regions and customer segments, which include the leading four U.S. cloud providers, top three Chinese cloud providers, Neocloud, and large enterprises.

Conclusion

As the demand for robust AI networks continues to surge, market expectations signal a transformative shift towards Ethernet for data center infrastructures. The insights presented in Dell'Oro Group's report confirm a progressive movement towards Ethernet solutions, painting a compelling narrative of opportunity and innovation in the AI networking domain. This evolution not only reinforces the growing prominence of Ethernet in global tech markets but also sets the stage for successive advancements in data center technologies, highlighting an exciting era for both consumers and businesses alike.