Ethernet to Lead the Scale-up Segment of the Market
REDWOOD CITY, Calif. – February 04, 2026 – According to the Data Center Switch – AI Back-end Networks Report by Dell’Oro Group, the trusted source for market information about the telecommunications, security, networks, and data center industries, spending on data center switches deployed in AI back-end networks is forecast to surpass $100 billion by 2030, driven by expanding deployments across scale-up, scale-out, and scale-across domains. While multiple technologies are expected to coexist and see strong adoption over the forecast period, Ethernet is projected to dominate both the scale-up and scale-out segments of the market.
“The next wave of the AI journey — driven by agentic and physical AI applications— is placing unprecedented pressure on compute demand,” said Sameh Boujelbene, Vice President at Dell’Oro Group. “To meet this explosive demand for compute, we can no longer rely solely on scale-out networks to provide GPU-to-GPU connectivity across racks. This shift is driving the rise of scale-up fabrics that tightly couple GPUs and memory within a shared high-bandwidth environment, enabling the distributed reasoning.”
“Scale-up compute fabrics have been historically dominated by proprietary fabrics such as NVLink but just as Ethernet prevailed over InfiniBand in large-scale scale-out environments, we are now seeing alternative technologies such as UALink and Ethernet gain momentum in scale-up compute fabrics. While we predict a strong adoption of UALink, we expect Ethernet to emerge as the long-term winner across both scale-up and scale-out architectures,” continued Boujelbene.
Additional highlights from the Data Center Switch – AI Back-end Networks 5-Year Forecast January 2026 Report:
- The majority of switch ports deployed in AI back-end networks have shifted to 800 Gbps, and are expected to be 1600 Gbps by 2027 and 3200 Gbps by 2030.
- Co-packaged Optics adoption to accelerate during our forecast horizon, spearheaded by NVIDIA.
- Neo Cloud will be the fastest growing customer segment over the next five years.
Dell’Oro Group’s Data Center Switch – AI Back-end Networks 5-Year Forecast Report provides an in-depth look at switches deployed in AI back-end networks to connect accelerated servers. The report contains in-depth market information on scale-up, scale-out and scale-across technologies and use cases as well as the choice made by various hyperscalers. It also covers revenue split by various regions and various customers segments — including the Top 4 US Cloud, Top 3 China Cloud, Neo Cloud and large enterprises. For more information about the report, please contact us at dgsales@delloro.com.
Dell’Oro Group is a market research firm that specializes in strategic competitive analysis in the telecommunications, security, enterprise networks, and data center infrastructure markets. Our firm provides in-depth quantitative data and qualitative analysis to facilitate critical, fact-based business decisions. For more information, contact Dell’Oro Group at +1.650.622.9400 or visit https://www.delloro.com.
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