Nvidia quietly rose to the top of a $10 billion market you may have never heard of

Nvidia’s dominance in AI is moving beyond chips.

For the first time, the company became the top vendor by revenue in data center Ethernet switches — the networking gear that helps connect AI chips inside data centers, according to market research firm IDC.

This market is growing fast because cloud giants and other large businesses are pouring hundreds of billions into building out AI data centers.

IDC research vice president Paul Nicholson called Nvidia’s ascension “one of the most significant vendor landscape shifts IDC has tracked in enterprise networking.” In the first quarter of 2026, Nvidia generated $2.1 billion in data center Ethernet switch revenue — a 21.5% share of the market.

That’s up from 4% in the first quarter of 2024, said IDC senior research manager Brandon Butler.

Nvidia has pushed ahead of rivals like Arista Networks, which held a 20.7% share of the data center Ethernet switch market in the first quarter of this year.

Other major players include Cisco, Huawei, and HPE.

The data center Ethernet switch market totaled $10 billion in the first quarter, according to IDC, growing 61% from a year earlier.

IDC attributed Nvidia’s growth in networking revenue to its Spectrum-X product, “a tightly integrated system” that’s designed to work closely with its AI chips, Butler said.

Butler said Nvidia’s approach appeals to cloud giants looking to build quickly and avoid piecing together parts from multiple vendors.

The trend also reflects a broader shift of companies buying networking and computing products together, IDC said.

The chip giant has increasingly highlighted networking as a major growth driver.

At a shareholder meeting on Wednesday, Nvidia CEO Jensen Huang said Spectrum-X is “now larger than all other Ethernet networking peers combined.” The comments echoed Nvidia’s most recent earnings call in May, when chief financial officer Colette Kress said the company’s broader data center networking revenue had tripled to $15 billion from the previous year.

Nvidia’s networking business traces back to its 2019 acquisition of Mellanox, which gave the company a foothold in data center networking before the AI boom took off.

Cloud giants are increasingly looking to diversify their supplier base, Butler said, while businesses may lean on existing relationships with networking providers as they ramp up their infrastructure.

Contact this reporter via email at gweiss@businessinsider.com or Signal at @geoffweiss.25.

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