#United States #Redwood City #Dell'Oro Group #Ethernet #AI Networks

AI Back-End Network Sales Surge as Ethernet Dominates

According to a recent report from Dell'Oro Group, Ethernet technology has become the leading force in the switch market for AI back-end networks, now accounting for more than two-thirds of data center switch sales for the third quarter of 2025. This marks a significant increase from last year, when Ethernet comprised less than half of sales. The growing demand for robust networking solutions, powered by artificial intelligence, is driving this dramatic shift in market dynamics.

Understanding the Shift in Technology

The surge in Ethernet adoption can be attributed to various factors, including substantial investments from major tech companies. Key players like Google, Amazon, Microsoft, Meta, and Oracle are expanding their infrastructure to meet the increasing demand for AI capabilities. They are transitioning to Ethernet not only for its cost-effectiveness but also for enhanced scalability and performance.

Sameh Boujelbene, Vice President at Dell'Oro Group, emphasized how the shift aligns with market expectations, stating, “The rapid ramp of NVIDIA's latest Blackwell Ultra platform drove a surge in InfiniBand switch sales, which has exhibited strong growth for the second straight quarter. However, the overall growth in Ethernet sales is outpacing InfiniBand, fueled by robust activities from large AI cluster builders.”

Key Market Highlights

The report further highlights interesting trends in the data center switch market:

• - Accton, Arista, and Cisco have captured the largest market shares in the Ethernet segment, while Celestica and NVIDIA combine for nearly 50% of the market share. This showcases a competitive landscape where traditional networking hardware companies are expanding their influence in the AI-driven market.
• - Ethernet switches capable of 800 Gbps accounted for the majority of shipments and revenues during the quarter, emphasizing the demand for high-speed networking solutions within AI clusters.

The Role of Major Players

Players like NVIDIA and Celestica not only lead the market but are also pivotal in delivering cutting-edge products that cater to the rapidly evolving technological landscape. The growth in switch sales indicates a broader trend towards AI infrastructure, which is becoming increasingly indispensable in various industries.

Implications for the Future

The growing reliance on Ethernet technology in AI back-end networks signals that businesses are preparing for sustained demand in AI applications. This transition could lead to further innovations in networking technologies, significantly impacting how businesses deploy and utilize their AI resources.

The upcoming Dell'Oro Group’s Data Center Switch – AI Back-end Networks Quarterly Report will include detailed insights into manufacturers' revenue, ports shipped, and average selling prices for different Ethernet switch configurations ranging from less than 100 Gbps up to over 3.2 Tbps. This data will be crucial for stakeholders looking to navigate the competitive landscape effectively.

Conclusion

In conclusion, as we look towards the future, the trend towards Ethernet dominance in the AI back-end network switch market appears to be solid. Given the rapid advancements in AI and increased investments from major corporations, the competition will likely intensify, shaping the next generation of networking solutions and influencing broader market dynamics.