AI Networking and Optics: NVLink, Ethernet, CPO — 2026-09-02
Nvidia is aggressively expanding its control over AI networking infrastructure, with new analyses positioning NVSwitch as the dominant "InfiniBand of scale-up" and highlighting a growing IP licensing empire built on NVLink. Meanwhile, Broadcom prepares for critical fiscal Q3 earnings, with market sentiment heavily influenced by its Tomahawk 6 Ethernet switch adoption as the primary alternative to Nvidia's proprietary fabrics.
AI Networking and Optics: NVLink, Ethernet, CPO — 2026-09-02
Top developments
NVSwitch Emerges as the "InfiniBand" of Scale-Up AI
On August 31, 2026, The Next Platform published an analysis arguing that Nvidia's NVSwitch has become the de facto standard for scale-up AI networks, effectively serving the same role for intra-node GPU communication that InfiniBand once served for inter-node clusters. The report notes that while external fabrics battle between Ethernet and InfiniBand, the internal switch fabric is increasingly dominated by Nvidia's proprietary NVLink/NVSwitch architecture, creating a high barrier to entry for competitors in the scale-up domain. This development matters because it cements Nvidia's hardware moat; even if customers adopt third-party Ethernet switches for scale-out, they likely remain locked into Nvidia's proprietary interconnects for GPU-to-GPU communication within servers.
Nvidia Builds IP Licensing Empire on NVLink
Also on August 31, 2026, The Register reported that Nvidia is expanding beyond hardware sales by building an IP licensing empire around its NVLink technology. The article highlights that even when companies believe they are purchasing non-Nvidia infrastructure, they may still be paying royalties or utilizing licensed NVLink protocols. This shift is significant for the optics and networking supply chain because it suggests that revenue from AI networking is no longer just about selling GPUs and switches, but also about controlling the interface standards themselves, potentially squeezing margins for third-party interconnect providers who do not license the technology directly.
Broadcom Earnings Focus on AI Networking Share
As of September 2, 2026, financial analysts are closely watching Broadcom’s fiscal Q3 earnings, with the company positioned as the primary beneficiary of hyperscaler capex that bypasses Nvidia. Recent reports indicate that three AI networking stocks, including Broadcom, have raised their outlooks due to the "quiet niche" of networking infrastructure capturing an outsized share of cluster spending. The focus is on whether Broadcom's Tomahawk 6 (102.4Tbps) and upcoming roadmap can sustain market share against Nvidia’s Spectrum-X and Quantum-X lines, particularly as Ethernet gains dominance in scale-out deployments.
Optical Interconnects Become Decisive Cornerstone
In a recent update dated September 1, 2026, AscentOptics emphasized that optical interconnects have evolved from an optional upgrade to a "decisive cornerstone" in InfiniBand and Ethernet deployments. As port speeds advance toward 800G and 1.6T, the reliability of these optical links determines whether thousands of GPUs function as a unified supercomputer. This underscores the critical role of optics makers in supporting both the proprietary Nvidia ecosystem and the open Ethernet standards championed by Broadcom and Arista.
Local view
No recent local-language media coverage specific to AI networking hardware was identified in the provided research results for the past 7 days.
Context & numbers
- Broadcom Stock Performance: Broadcom closed at $368.79 on Friday, August 29, 2026, ahead of its Wednesday, September 2 earnings report.
- AI Infrastructure Spending: JPMorgan projects annual AI infrastructure spending will reach $1.4 trillion by 2030, with networking and silicon being key bottlenecks.
- Ethernet vs. InfiniBand: Recent industry analysis indicates Ethernet continues to dominate AI networking switch sales, doubling in volume recently, though InfiniBand is seeing a rebound in specific high-performance segments. (Note: Source date is June 2026, included only as background context for current market structure)
On the radar
- Broadcom Earnings: Broadcom reports fiscal Q3 results on September 2, 2026. Investors are looking for specific guidance on Tomahawk 6 shipment volumes and co-packaged optics (CPO) adoption rates.
- 1.6T Transceiver Ramp: Industry forecasts suggest 1.6T transceiver shipments will ramp significantly in the second half of 2026, which could impact supplier margins and availability for Q4 cluster builds.
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