Nvidia’s Israeli Networking Division Doubles Sales

29 August, 2025

Connectivity revenues hit $7.3 billion in Q2; Spectrum-X sales expected to reach $10 billion this year; surging demand for InfiniBand

By Yohai Schwiger

Nvidia’s Networking Division, headquartered in Israel, continues to outpace the company’s overall growth with record-breaking momentum. In the second quarter, the division generated $7.3 billion in revenue—a 98% jump from last year and 46% growth compared to the previous quarter. The surge was driven by strong demand for Spectrum-X Ethernet, InfiniBand, and NVLink—critical interconnect technologies that link processors inside servers and connect data centers worldwide.

According to Nvidia’s latest quarterly report, Spectrum-X alone is now generating more than $10 billion in annualized revenue, with double-digit growth in Q2. InfiniBand also delivered standout results, with revenues nearly doubling in a single quarter thanks to adoption of the new XDR generation, which doubles bandwidth compared to its predecessor—a key enabler for running today’s massive AI models.

At the same time, demand for NVLink—used to connect GPUs and other components within servers—is rising rapidly, fueled by strong sales of Nvidia’s GB200 and GB300 systems. On the earnings call, executives stressed that “the growing demands of AI compute clusters require ultra-efficient, low-latency networking.” The message underscored the strategic importance of the Israeli division to Nvidia’s broader growth. Companywide, Nvidia’s total Q2 revenue climbed 56% year-over-year to a record $46.7 billion.

Red Tape Clouds China Sales

Despite receiving U.S. licenses in July to sell H20 chips to certain Chinese customers, Nvidia disclosed that no such sales have taken place. The holdup stems from regulatory limbo: Washington has signaled it expects 15% of revenues from these deals, but has yet to issue a formal rule, leaving Nvidia unable to act on the licenses it already holds.

Meanwhile, Nvidia is developing a Blackwell-based chip specifically for China. “Our products are designed and sold for beneficial commercial use, and any licensed sales will support the U.S. economy and its technology leadership,” the company said. Given the uncertainty, Nvidia excluded potential China H20 sales from its Q3 forecast. If the issue is resolved, it expects $2–5 billion in H20 sales next quarter.

Rubin Platform Enters Production

Nvidia also confirmed that its next-generation AI platform, Rubin, has entered production. For the first time, the platform integrates Nvidia’s own CPU—codenamed Vera—alongside Rubin GPUs, eliminating reliance on Intel or AMD processors. Together, Vera and Rubin will form the computational core of the system.

Rubin will also feature several Israeli-developed networking components: the CX9 SuperNIC, a next-gen NVLink switch, upgraded Spectrum-X switches, and a silicon-photonics processor enabling ultra-fast optical communication between servers and chips. Rubin is slated for mass production in 2026, keeping Nvidia on its one-year cadence of platform rollouts and signaling that innovation will extend well beyond GPUs to networking, compute, and software.

Sovereign AI Demand Surges

A fast-emerging market segment—dubbed “Sovereign AI”—is becoming a growth engine. These national initiatives aim to build independent AI infrastructure using local compute, data, and talent. Nvidia estimates revenue from this sector will exceed $20 billion in 2025, more than double 2024 levels.

The projects are vast in scale, with Nvidia often at the center. In Europe, the European Commission announced a €20 billion plan to build 20 “AI factories” across France, Germany, Italy, and Spain—including five giga-factories that will boost the continent’s compute capacity tenfold. In the UK, the new Isambard-AI supercomputer—powered by Nvidia—delivers 21 exaflops of performance to accelerate research in fields ranging from drug discovery to climate modeling.

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Posted in: AI , News

Posted in tags: Networking , Nvidia

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