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Investing.com -- Arista Networks (NYSE:ANET) stock fell 2.4% Monday after NVIDIA (NASDAQ:NVDA) announced that Meta (NASDAQ:META) and Oracle (NYSE:ORCL) will adopt its Spectrum-X Ethernet networking switches for their AI data centers.
NVIDIA revealed that Meta will integrate Spectrum Ethernet switches into its networking infrastructure for the Facebook Open Switching System (FBOSS), while Oracle plans to build giga-scale AI supercomputers with Spectrum-X Ethernet switches.
The announcement appears to have triggered concerns about potential competition for Arista Networks , which is a major provider of cloud networking solutions and data center switches. Investors may be viewing NVIDIA’s expanding footprint in the networking space as a competitive threat to Arista’s market position.
According to NVIDIA, the Spectrum-X Ethernet platform is specifically designed for the trillion-parameter model era, enabling hyperscalers to interconnect millions of GPUs with unprecedented efficiency. The company claims its technology has demonstrated record-setting efficiency, achieving 95% data throughput with its congestion-control technology compared to roughly 60% for off-the-shelf Ethernet at scale.
NVIDIA CEO Jensen Huang emphasized the importance of this technology, stating, "Spectrum-X is not just faster Ethernet — it’s the nervous system of the AI factory, enabling hyperscalers to connect millions of GPUs into a single giant computer to train the largest models ever built."
The market reaction suggests investors are reassessing Arista’s competitive position as NVIDIA continues to expand its AI infrastructure offerings beyond GPUs into networking solutions.
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