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United States Data Center Networking Market to Reach USD 10.43 Billion by 2031 as AI and Hyperscale Demand Accelerates

globenewswire.com
CSCO Cisco Systems is mentioned as a key player in the data center networking market, which is experiencing growth due to AI and hyperscale demand. The article does not provide specific positive or negative sentiment for Cisco itself, but its products are part of the overall market expansion. ANET Arista Networks is highlighted for its adoption by hyperscale operators for AI training clusters, specifically mentioning their 7700R4 platforms. This indicates strong demand and a positive outlook for the company's AI-focused networking solutions. DELL Dell Technologies is mentioned as a company profile within the competitive landscape. Its inclusion indicates relevance to the data center networking market, but no specific sentiment is assigned in the article. HPE HPE is listed as a company profile in the competitive landscape. Its inclusion suggests it is a participant in the data center networking market, but the article does not provide specific sentiment details for the company. NVDA NVIDIA is explicitly mentioned for its custom silicon influencing purchasing strategies in data centers for accelerated computing and AI. The company's role in providing essential components for AI workloads drives a strong bullish sentiment. INTC Intel Corporation is listed as a company profile in the competitive landscape. While not detailed with specific sentiment, its role in technology providers for data centers suggests it is part of the market's growth. AVGO Broadcom is highlighted for its Tomahawk 6 platform supporting high bandwidth (1.6 Tb/s ports), crucial for AI environments. This indicates strong demand and a positive outlook for their advanced networking solutions. EXTR Extreme Networks is included in the list of company profiles for the competitive landscape. Its mention suggests it is a player in the data center networking market, but no specific sentiment is provided. MSFT Microsoft is mentioned for its major infrastructure investments in AI-optimized switches and network interface cards, contributing to the demand in the data center networking market. Their involvement in SONiC open-source also indicates strategic positioning. IBM IBM Corporation is listed as a company profile in the competitive landscape. Its inclusion suggests it is a participant in the data center networking market, but the article does not provide specific sentiment details. EAT Eaton Corporation plc is listed as a company profile. While involved in power management for data centers, the article's primary focus is networking, and no specific sentiment is detailed for Eaton. EMR Emerson Electric Co. is mentioned as a company profile. Its relevance to data center infrastructure is noted, but the article does not provide specific sentiment details for Emerson. NTAP NetApp, Inc. is listed as a company profile in the competitive landscape. Its inclusion suggests it is a player in the data center market, but the article does not provide specific sentiment details. SMCI Super Micro Computer, Inc. is mentioned in the context of providing components for AI infrastructure, which is a major driver of the data center networking market growth. This implies a positive impact on their business. EQIX Equinix, Inc. is mentioned for its interconnection services, which are crucial for the expanding data center networking market driven by AI and hyperscale demand. This suggests a positive benefit from market growth. DLR Digital Realty Trust, Inc. is mentioned as a key player in the data center market, benefiting from hyperscale expansion and AI infrastructure investment. This indicates a positive outlook due to market trends. CC CommScope Holding Co., Inc. is listed as a company profile. While involved in networking infrastructure, the article does not provide specific sentiment details for CommScope.

United States Data Center Networking Market to Reach USD 10.43 Billion by 2031 as AI and Hyperscale Demand Accelerates Dublin, Aug. 26, 2026 (GLOBE NEWSWIRE) -- The "United States Data Center Networking - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2026-2031)" has been added to ResearchAndMarkets.com's offering.

The United States data center networking market is projected to grow from USD 8.18 billion in 2025 to USD 8.52 billion in 2026. By 2031, the market is forecast to reach USD 10.43 billion, representing a compound annual growth rate of 4.14% from 2026 to 2031. Growth is being supported by hyperscale data center expansion, artificial intelligence infrastructure investment, cloud adoption, 5G deployments and the transition to higher-bandwidth Ethernet networks.

AI Workloads Drive Hyperscale Network Investment

Hyperscale operators are redesigning data center networks to support AI workloads that can transfer substantially more data than traditional enterprise applications. Distributed GPU clusters require low-latency, non-blocking network fabrics capable of handling intensive east-west traffic. Meta's adoption of Arista 7700R4 platforms for AI training clusters reflects growing demand for terabit-scale connectivity, while major infrastructure investments from Microsoft and Amazon Web Services are increasing demand for AI-optimized switches, optical components and network interface cards.

Custom silicon from NVIDIA, AMD and other technology providers is also influencing purchasing strategies. Data center operators increasingly favor tightly integrated networking systems designed for accelerated computing, creating new opportunities across switching, optical interconnect and network automation technologies.

Migration to 400G and 800G Ethernet Gains Momentum

The transition from 100G infrastructure to 400G and 800G Ethernet represents a major development in the United States data center networking market. AI training environments can rapidly saturate existing links, prompting cloud service providers and hyperscalers to deploy higher-capacity fabrics. Broadcom's Tomahawk 6 platform, which supports 1.6 Tb/s ports, signals continued preparation for future bandwidth requirements.

The Ultra Ethernet Consortium's ratification of UEC 1.0 in June 2025 further supports AI-focused Ethernet adoption. The standard introduces capabilities designed to improve traffic distribution and network performance for large-scale AI environments. However, the pace of deployment remains affected by extended lead times for 800G optical modules, with supply constraints expected to influence selected projects until manufacturing capacity expands.

Supply Constraints and Upgrade Costs Present Challenges

Optical transceiver and application-specific integrated circuit supply bottlenecks continue to affect market growth. Lead times for some 800G modules have reached 18 months as manufacturers prioritize high-performance optics for AI infrastructure. Equipment tariffs have also added an estimated 8% to 20% to certain networking costs, encouraging some enterprises to extend the service life of existing 100G assets.

High capital expenditure associated with upgrading legacy 10G and 40G networks to 400G and above may restrain adoption among cost-sensitive organizations. Nevertheless, edge computing expansion, 5G micro data centers and state-level energy-efficiency incentives for intelligent network fabrics are expected to create additional growth opportunities.

Products Maintain Market Leadership as Services Expand

Networking products accounted for 77.60% of market revenue in 2025, supported by large-scale purchases of fixed-form-factor switches by hyperscale operators. Ethernet switches remained the leading product category, while software-defined networking controllers gained adoption as organizations pursued automated policy management. Network security appliances also received renewed attention as zero-trust architectures increased the need for extensive segmentation across data center environments.

Data center networking services are projected to grow at a 4.32% CAGR as customers seek installation, integration, consulting, maintenance and managed network support. The complexity of multi-vendor 400G and 800G environments is increasing demand for specialized expertise, particularly in optical deployment, automation and AI network optimization. Providers that combine hardware, optics and technical services under outcome-based agreements are positioned to benefit from this trend.

Industry Adoption Broadens Across Key End Users

IT and telecommunications companies held a 34.15% market share in 2025, driven by 5G core deployments and public cloud backbone upgrades. Financial institutions continued to invest in low-latency connectivity for algorithmic trading and other time-sensitive applications.

Manufacturing is forecast to record a 5.08% CAGR as Industry 4.0 facilities adopt real-time analytics, connected equipment and robotic production systems. Government and defense agencies are modernizing secure networks for AI model training, while healthcare organizations require additional bandwidth for diagnostic imaging and electronic health records. Media companies are also expanding network capacity to support 4K and 8K production workflows. These varied applications are transforming the United States data center networking market into an increasingly diverse, high-performance infrastructure ecosystem.

Key Topics Covered:

1 INTRODUCTION

1.1 Study Assumptions and Market Definition

1.2 Scope of the Study

2 RESEARCH METHODOLOGY

3 EXECUTIVE SUMMARY

4 MARKET LANDSCAPE

4.1 Market Overview

4.2 Market Drivers

4.2.1 Surge in hyperscale and AI-driven bandwidth demand

4.2.2 Migration to 400G/800G Ethernet fabrics

4.2.3 Expansion of edge and 5G micro-data-centers

4.2.4 State energy-efficiency incentives for smart fabrics

4.2.5 Adoption of CXL-enabled disaggregated architectures

4.2.6 Zero-trust push driving fabric-level micro-segmentation

4.3 Market Restraints

4.3.1 Optical transceiver and ASIC supply bottlenecks

4.3.2 High capex for legacy 10/40 G above 400 G upgrades

4.3.3 Rising water-usage limits curbing hyperscale expansion

4.3.4 Scarcity of automation-skilled network engineers

4.4 Supply-Chain Analysis

4.5 Regulatory Landscape

4.6 Technological Outlook

4.7 Porter's Five Forces Analysis

4.7.1 Threat of New Entrants

4.7.2 Bargaining Power of Buyers

4.7.3 Bargaining Power of Suppliers

4.7.4 Threat of Substitutes

4.7.5 Intensity of Competitive Rivalry

4.8 Assesment of Macroeconomic Factors on the Market

5 MARKET SIZE AND GROWTH FORECASTS (VALUE)

5.1 By Component

5.1.1 Products

5.1.1.1 Ethernet Switches

5.1.1.2 Routers

5.1.1.3 Storage Area Network (SAN)

5.1.1.4 Application Delivery Controllers (ADC)

5.1.1.5 Network Security Appliances

5.1.1.6 Software-Defined Networking (SDN) Controllers

5.1.1.7 Optical Interconnects

5.1.2 Services

5.1.2.1 Installation and Integration

5.1.2.2 Training and Consulting

5.1.2.3 Support and Maintenance

5.1.2.4 Managed Network Services

5.2 By End-User

5.2.1 IT and Telecommunications

5.2.2 Banking, Financial Services and Insurance (BFSI)

5.2.3 Government and Defense

5.2.4 Media and Entertainment

5.2.5 Healthcare and Life Sciences

5.2.6 Manufacturing and Industrial

5.2.7 Other End-Users

5.3 By Data-Center Type

5.3.1 Colocation

5.3.2 Hyperscalers/Cloud Service Providers

5.3.3 Edge/Micro Data Centers

5.4 By Bandwidth

5.4.1 Less Than or Equal to 10 GbE

5.4.2 25-40 GbE

5.4.3 50-100 GbE

5.4.4 Greater Than 100 GbE

6 COMPETITIVE LANDSCAPE

6.1 Market Concentration

6.2 Strategic Moves

6.3 Market Share Analysis

6.4 Company Profiles (includes Global level Overview, Market level overview, Core Segments, Financials as available, Strategic Information, Market Rank/Share for key companies, Products and Services, and Recent Developments)

6.4.1 Cisco Systems, Inc.

6.4.2 Arista Networks, Inc.

6.4.3 Juniper Networks, Inc.

6.4.4 Dell Technologies, Inc.

6.4.5 Hewlett Packard Enterprise (HPE)

6.4.6 NVIDIA Corp. (Mellanox and Cumulus)

6.4.7 Intel Corporation

6.4.8 Broadcom Inc.

6.4.9 Extreme Networks, Inc.

6.4.10 Microsoft (SONiC Open-Source)

6.4.11 VMware by Broadcom

6.4.12 Huawei Technologies Co., Ltd.

6.4.13 IBM Corporation

6.4.14 Schneider Electric SE

6.4.15 Eaton Corporation plc

6.4.16 Emerson Electric Co.

6.4.17 NetApp, Inc.

6.4.18 Super Micro Computer, Inc.

6.4.19 Nvidia Networking (Infiniband)

6.4.20 Equinix, Inc. (Interconnection)

6.4.21 Digital Realty Trust, Inc.

6.4.22 Panduit Corp.

6.4.23 CommScope Holding Co., Inc.

7 MARKET OPPORTUNITIES AND FUTURE OUTLOOK

7.1 White-space and Unmet-Need Assessment

For more information about this report visit https://www.researchandmarkets.com/r/1rzavy

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