AI back-end server network switch market to reach $80bn market in 2029

Spending on switches deployed in AI back-end networks used to connect accelerated servers is forecast to approach $80 billion over the next five years, nearly doubling the total data centre switch market opportunity, says Dell’Oro.

Current data centre 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,” says Dell’Oro. P Sameh Boujelbene, “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.”

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, Tier 2/3 and large enterprises will brow strongly because of their accelerated pace of AI workload adoption and infrastructure deployment.