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It isn't just data centers—AI's plumbing needs an upgrade

Mint Mumbai

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November 21, 2024

The coming wave of artificial intelligence usage won't just strain data centers and power grids—it will also stress the country's network capabilities.

- Belle Lin

It isn't just data centers—AI's plumbing needs an upgrade

That's because more people will use AI chatbots and agents, which will talk in turn to still more AI agents—and all that requires more data, computing and back-end technology systems like networking.

Networking is considered the "plumbing" that moves data and applications inside and between data centers, as well as between data centers and internet-connected devices.

"The amount of traffic that's starting and will continue to be generated with AI, where you get into a machine-to-machine environment, that amount of traffic is going to be monumental," said Chris Sharp, chief technology officer of data center operator Digital Realty.

Chip giant Nvidia, networking equipment maker Cisco, data center providers, and internet carriers and exchanges like Lumen Technologies and DE-CIX are eyeing opportunities in a network revamp, which could include gear upgrades, new software tools, and working with network providers to increase capacity and capability.

Cisco last week reported lower quarterly revenue and profit, but noted demand for infrastructure boosted its results.

The $34.61 billion global data center networking market is forecast to reach $118.94 billion by 2033, according to market research firm Straits Research.

Sales of data center switches, which route traffic, could nearly double over the next few years, and sales of back-end switches, which connect AI chips, could quadruple, BNP Paribas said.

Global business investment in upgraded AI data center switches alone—which can handle more data than traditional switches—is expected to grow from $127.2 million this year to $1 billion by 2027, according to International Data Corp.

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