Nvidia’s Networking Revenue Soars to $5 Billion

30 May, 2025

Networking products developed mainly in Israel. Revenues jumped 63% in Q1 — over four times faster than total company growth. Ethernet switch sales expected to reach $8 billion this year

Nvidia reported record quarterly revenue for the seventh consecutive time last night. As the company’s data center operations continue to expand, so does the demand for its networking products — developed in Nvidia’s Israeli R&D center and based on technology from Mellanox, acquired in 2020. In the first quarter, networking revenue reached $5 billion, marking a 63% increase from the previous quarter — significantly outpacing the company’s overall revenue growth of 12%, which totaled $44.1 billion.

Nvidia’s networking division consists of two main product lines: NVLink connectivity components, which link GPUs within the same chip package or rack, and Ethernet and InfiniBand-based interconnects that connect servers across the data center. Both product families are currently developed in Israel. Revenue from fifth-generation NVLink components — part of the new Blackwell platform — totaled $1 billion in Q1, reflecting surging demand for the Blackwell chip, which accounted for 70% of Nvidia’s data center sales last quarter.

Spectrum-X Ethernet switches, originally developed under Mellanox, are also seeing growing demand amid the global expansion of data center infrastructure. According to Nvidia, switch sales are projected to reach $8 billion this year. “Adoption among cloud and internet companies like Microsoft, CoreWeave, Oracle, and xAI is strong. In the past quarter, Google and Meta also joined the list of customers,” said Nvidia founder and CEO Jensen Huang during the earnings call.

Huang described an ongoing arms race among the tech giants. According to him, hyperscalers are now deploying approximately 1,000 new NVL72 server racks every week — each containing 72 Blackwell GPUs, amounting to around 72,000 new chips weekly. Microsoft alone is expected to deploy hundreds of thousands of Blackwell GPUs, primarily to power OpenAI workloads. Nvidia has already begun shipping samples of the Blackwell Ultra, which is expected to feature 50% more HBM memory and deliver significantly improved inference performance.

Nvidia also recently launched new Ethernet and InfiniBand switches based on silicon photonics technology, also developed in Israel, designed to enhance energy efficiency in data center operations.

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