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Nvidia CEO Jensen Huang was years ahead of the market when he pushed the company to start tinkering with building AI-specific chips back in 2010<\/a>, more than a decade before the current buzz around AI. A similar move in 2020 \u2014 doubling down on data center networking with a strategic acquisition \u2014 has led to one of the company\u2019s most lucrative and quickly growing divisions,\u00a0but with little fanfare.<\/p>\n In just a few years, Nvidia\u2019s networking business, designed to connect data centers, has grown into the company\u2019s second-largest revenue driver behind compute. Last quarter, it reported $11 billion in revenue, a year-over-year increase of 267%, and brought in more than $31 billion for the full year, according to Nvidia\u2019s most recent earnings<\/a>.<\/p>\n Driven by growth in AI processing, the division includes tech like NVLink, which powers communication between GPUs on a data center rack; Nvidia InfiniBand Switches, an in-network computing platform; Spectrum-X<\/a>, the ethernet platform for AI networking; and co-packaged optics switches, among others.<\/p>\n Together, Nvidia\u2019s networking business includes all the tech needed for building an \u201cAI factory,\u201d a data center designed for training AI models. <\/p>\n Kevin Cook, a senior equity strategist at Zacks Investment research, told TechCrunch that Nvidia\u2019s networking business is one of the most impressive new segments from the company. \u201c[Nvidia\u2019s networking business] reports $11 billion for the quarter; that number is greater than Cisco\u2019s networking business, almost as big as the full-year estimates,\u201d Cook said, adding it does in one quarter what Cisco\u2019s business does in a year.<\/p>\n And yet \u2014 the business segment doesn\u2019t draw the same attention as the company\u2019s chip business, which is significantly larger. It also doesn\u2019t get as much fanfare as the company\u2019s gaming business, it\u2019s original bread-and-butter business, which is nearly three times smaller.<\/p>\n The origin of Nvidia\u2019s networking business comes from Mellanox, a networking company founded in Israel in 1999 that Nvidia acquired in 2020 for $7 billion<\/a>.<\/p>\n Techcrunch event<\/p>\n \n\t\t\t\t\t\t\t\t\tSan Francisco, CA<\/span> Kevin Deierling is a senior vice president of networking at Nvidia. He joined the company through the acquisition of Mellanox. Deierling told TechCrunch that people not knowing about Nvidia\u2019s networking business could be his fault for doing a bad job of marketing it \u2014 but he doesn\u2019t like that answer.<\/p>\n \u201cPeople think of networking as just, \u2018I got a printer, and I need to connect to it,\u2019\u201d Deierling said. \u201cJensen said this the first day when he acquired us, he said the data center is the new unit of computing. Networking is a lot more than just moving the smaller amounts of data between a compute node; it\u2019s actually a foundation.\u201d<\/p>\n While Deierling said he didn\u2019t really understand why Huang bought the company when he did \u2014 he gets it now. Having a networking business alongside its GPU business allows the company to sell its chips with the tech that they work best with.<\/p>\n \u201cWhen Jensen bought Mellanox in 2020, he saw that was the missing piece to make GPUs a complete package,\u201d Cook, the Zack\u2019s analyst, said.<\/p>\n Deierling added that he thinks another aspect of Nvidia\u2019s networking success is that it only sells the tech as a full-stack solution, as opposed to individual components, and it doesn\u2019t actually sell the tech itself, but rather through its partners.<\/p>\n \u201cI can\u2019t think of other companies that have [the] full-stack capabilities that we have,\u201d Deierling said. \u201cWe are really different. We build the full compute stack, fully integrated stack, and then we go to market through all of our partners.\u201d<\/p>\n Nvidia just announced a whole new slew of updates to its networking system<\/a> during Huang\u2019s keynote address on March 16 at the company\u2019s annual Nvidia GTC technology conference<\/a>. The company launched the Nvidia Rubin platform, which includes six new chips to power an \u201cAI supercomputer.\u201d Nvidia also announced a new Nvidia Inference Context Memory Storage platform and more efficient Nvidia Spectrum-X Ethernet Photonics switches, among other products.<\/p>\n \u201cIt\u2019s no longer a peripheral to connect the printer, some other slow I\/O device,\u201d Deierling said about networking. \u201cIt\u2019s fundamental to the computer. In the old days, we had what was called the back lining inside the computer. Today, the network is the back lining of the AI factory, and it\u2019s super important.\u201d<\/p>\n<\/div>\n
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