AI Reshapes The Ethernet Datacenter Switch Market
The Next Platform, Thursday, March 27th, 2025
Two decades ago, the hyperscalers and cloud builders started remaking the Ethernet switch market in the datacenter in their own image, and now it looks like AI training and inference is going to morph Ethernet switching in the datacenter once again.
The amazing thing, as far as we are concerned, is how much campus and edge switching drives the overall Ethernet market. But as we have pointed out in recent quarters, we think that enterprises, governments, as well as all kinds of service providers have been stalling their spending on campus and edge gear so they can invest in networking equipment for their AI systems.
This has happened with server spending for sure, as we have shown, causing a recession in general purpose server spending. (That general purpose server recession is now over as companies finally need to upgrade their old servers to save power and cooling for AI systems.)