Nvidia’s Israeli networking business nears $15 billion in quarterly revenue
Revenue from the Mellanox-driven division nearly tripled year over year, underscoring Israel’s growing importance inside the AI giant.
Nvidia’s networking business, much of it built around technology developed in Israel, has become one of the fastest-growing and strategically important parts of the AI giant’s empire.
The division, which grew out of Nvidia’s $6.9 billion acquisition of Israeli chipmaker Mellanox Technologies, generated nearly $15 billion in quarterly revenue in the company’s latest earnings report, almost tripling year over year. The scale of the business now rivals that of major standalone semiconductor companies and underscores how critical networking infrastructure has become in the global AI race.
While Nvidia’s graphics processors remain at the center of the artificial intelligence boom, the company’s explosive growth increasingly depends on another layer of technology: the systems that allow tens of thousands of AI chips to communicate with each other at extreme speeds. Those technologies, including InfiniBand, NVLink and Spectrum-X Ethernet, are largely developed in Israel, particularly at Nvidia’s sprawling Yokneam campus established through the Mellanox acquisition.
The results highlight how Israel has evolved into one of Nvidia’s most strategically important engineering hubs. What began as an acquisition designed to complement Nvidia’s GPUs has become a core pillar of the company’s AI infrastructure business, as hyperscalers and cloud providers race to build ever larger AI systems.
Nvidia reported quarterly revenue of $81.62 billion, beating Wall Street expectations, while forecasting another massive quarter ahead with expected revenue of $91 billion. But buried within the broader results was the continued surge of the networking business, which has become indispensable to modern AI computing.
The economics of AI infrastructure have shifted dramatically in recent years. Training and running advanced AI models no longer depends solely on the power of individual chips, but on the ability to connect massive clusters of processors into unified computing systems. Without ultra-fast networking, the computational power of GPUs cannot be fully utilized.
That shift has transformed Mellanox’s technology from a complementary asset into one of Nvidia’s most valuable strategic advantages.
Just three months ago, Nvidia disclosed that quarterly networking revenue had reached nearly $11 billion, itself a staggering 263% annual increase. The latest figures show that growth accelerating even further, with the division now approaching $15 billion in quarterly sales.
The surge comes as the world’s largest technology companies dramatically increase spending on AI infrastructure. According to Reuters, Amazon, Microsoft, Alphabet and other major cloud providers are expected to spend more than $700 billion on AI infrastructure this year, up sharply from approximately $400 billion in 2025.
Nvidia CEO Jensen Huang has repeatedly emphasized that the AI buildout represents a long-term structural shift rather than a temporary cycle. On the company’s earnings call this week, Huang argued that Nvidia should continue growing faster than hyperscaler capital expenditures, pointing to a rapidly expanding customer base that now includes AI-focused cloud providers alongside traditional technology giants.
The company is also attempting to defend its dominance as competition intensifies. Rivals including AMD and Intel, as well as Nvidia’s own largest customers, are increasingly developing custom AI chips. Nvidia has responded by broadening its product portfolio, including the launch of its new Vera processor platform, which Huang said opens a new $200 billion market opportunity.
But networking remains one of the company’s clearest competitive moats.
Israel plays a central role in that effort. Nvidia now employs roughly 6,000 people in the country, and Huang has repeatedly described Israel as the company’s “second home.” Several of Nvidia’s key networking chips and systems, including BlueField-4 and advanced interconnect technologies, are developed locally.
“Our team in Israel is incredible,” Huang said earlier this year, while addressing employees amid the ongoing regional war. “The sacrifices they make for each other, for their country, are incredible.”
Despite the instability in the region, Nvidia has continued expanding aggressively in Israel. The company is planning a massive new campus in Kiryat Tivon expected to employ up to 10,000 workers, one of the largest private technology investments in the country’s history.
“We are 100% in Israel,” Huang said two months ago. “We are 100% behind the families there. We are 100% in the Middle East.”
