Dell’Oro Group forecasts AI back-end switch spending to top $100 billion by 2030

Dell’Oro Group forecasts data center switch spending for Artificial Intelligence (AI) back-end networks will exceed $100 billion by 2030, and reports Ethernet is projected to dominate both scale-up and scale-out architectures, information relevant to technical planners.

Market Overview

The report forecasts spending on switches deployed in AI back-end networks will surpass $100 billion by 2030 and covers scale-up, scale-out, and scale-across domains.

The analyst note states multiple technologies are expected to coexist across the forecast period while Ethernet is projected to lead in scale-up and scale-out segments.

Key Findings

“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.

The report notes the majority of switch ports have shifted to 800 Gbps and are expected to be 1600 Gbps by 2027 and 3200 Gbps by 2030, it also states co-packaged optics adoption will accelerate spearheaded by NVIDIA and that Neo Cloud will be the fastest growing customer segment over the next five years.

Technology or Trend Analysis

“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,” said Sameh Boujelbene.

Segment or Supplier Performance

The report identifies Neo Cloud as the fastest growing customer segment over the next five years and names NVIDIA as a spearhead for co-packaged optics adoption during the forecast horizon.

Forecast or Analyst Outlook

The analyst projects continued migration to higher port speeds through 2030 and anticipates coexistence of multiple interconnect technologies while Ethernet is expected to dominate scale-up and scale-out deployments.

Enterprises and infrastructure planners can use the report's timelines for port speeds, interconnect options, and customer-segment growth when assessing network procurement and architecture choices.

This Analyst Signals brief reflects a neutral, fact-based summary of the original research note.