Nvidia’s Networking Surge Fuels New Growth

Nvidia is reporting double-digit networking revenue growth due to the acceleration in AI infrastructure demand in the global data centers.

Nvidia has presented another impressive quarter, reporting over analyst expectations with revenue of $57.01 billion and demonstrates the emerging relevance of networking in its company. Although compute is still its key strength, the network grew to be a significant growth engine with a contribution of $8.2 billion. It is no small feat at 162 percent; that is the year-over-year growth.

CFO Colette Kress also disclosed that the Nvidia networking business had increased more than twofold due to a soaring demand of NVLink, InfiniBand and the quickly growing Spectrum-X Ethernet fabric. She further stated that almost the same number of Ethernet networking demands were similar to InfiniBand, thus pointing to a swift change in AI data center designs.

It did not become until 2024, with Spectrum-X, that Nvidia switched to Ethernet after many years of InfiniBand dominance reinforced through its Mellanox acquisition. However, within a year, its AI workload Ethernet solutions have proven critical to the infrastructure scaling of enterprises.

According to CEO Jensen Huang, the inference demand is being fuelled by networking and highlighted the rack-scale Blackwell systems at the company that recently achieved the industry bestseller due to enhanced networking fabrics. According to Huang, a multiyear advantage in the performance of AI is provided by the size-up networking of the company.

Analysts suspect that Nvidia will keep its momentum, as the adoption of AI in enterprises and projects to develop sovereign clouds is very premature. As Spectrum-XGS continues to grow, its multi-data center networking and AI infrastructure projections continue to increase, Nvidia seems set to continue its expansion.

The aspect of networking was previously a supporting factor, but this has now become the core of Nvidia's dominance in the AI era.