InfiniBand Leads in the Near Term, Ethernet Set to Dominate Soon
REDWOOD CITY, Calif. – July 16, 2024 – According to the new AI Networks for AI Workloads report by Dell’Oro Group, the trusted source for market information about the telecommunications, security, networks, and data center industries, spending on switches deployed in AI back-end networks used to connect accelerated servers is forecast to approach $80 B over the next five years, nearly doubling the total data center switch market opportunity. Current data center switch market spending is on front-end networks used primarily to connect general-purpose servers but AI workloads will require a new back-end infrastructure buildout. While InfiniBand is currently dominating the AI back-end network market, Ethernet is poised to take over soon.
“As predicted, growth in AI workloads and the associated data center infrastructure continues to track well ahead of market expectations. We therefore raised our forecast for the AI back-end networks compared to our prior December 2023 forecast, though the latter was initially considered very aggressive by a number of industry players,” said Sameh Boujelbene, Vice President at Dell’Oro Group. “The upward adjustment was broad-based across Ethernet and InfiniBand. We are now, however, much more optimistic about the ability of Ethernet to eclipse InfiniBand within the next few years. This optimism stems from significant improvements on the technology side as well as market demand.
“On the technology side, we are observing significant enhancements on Ethernet at multiple layers of the stack: network chips, network operating systems, network interface cards and optics. In terms of demand, we are tracking significant new Ethernet wins, such as the latest 100K GPU cluster win announced by NVIDIA, among many other potential wins by other switch vendors including Celestica, Cisco, Arista, Juniper, and Nokia,” continued Boujelbene.
Additional highlights from the AI Networks for AI Workloads Report:
- AI networks will accelerate the transition to higher speeds. The majority of the switch ports deployed in AI back-end networks are expected to be 800 Gbps by 2025 and 1600 Gbps by 2027.
- While most of the market demand will come from Tier 1 Cloud Service Providers, we have significantly raised our forecast for Tier 2/3 and large enterprises in light of their accelerated pace of AI workload adoption and infrastructure deployment.
Dell’Oro Group’s AI Networks for AI Workloads Advanced Research Report explores the use cases that optimize InfiniBand vs. Ethernet in AI back-end networks, as well as the choices made by large Cloud Service Providers. The report also provides a 5-year market forecast on a worldwide basis, by customer type, by InfiniBand vs. Ethernet, and by port speed. For more information about the report, please contact us at dgsales@delloro.com.
Dell’Oro Group is a market research firm that specializes in strategic competitive analysis in the telecommunications, security, enterprise networks, and data center infrastructure markets. Our firm provides in-depth quantitative data and qualitative analysis to facilitate critical, fact-based business decisions. For more information, contact Dell’Oro Group at +1.650.622.9400 or visit https://www.delloro.com.
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