Report: Tracking an AI-Driven High-Speed Ethernet Market in Transformation

Our long track record of testing work with network equipment manufacturers and service providers was historically defined by predictable timelines, gradual advancements in demand and anticipated product roadmaps.

No more.

AI-driven demand has completely upended an HSE market that used to advance steadily like clockwork.

Innovation is now a race in every direction. Stakeholders are quite literally going to the ends of the earth to gain an efficiency edge. Leaders are not waiting for standards to push speed boundaries.

Over 70 million HSE ports shipped in 2023, according to the Dell’Oro Group. Between 2024 and 2026, that number is expected to explode to 240 million.

Anatomy of a fast-advancing market

The impact of AI’s rise on HSE demand cannot be understated.

We are seeing significantly increased demand for faster and more efficient network infrastructures. Traditional north-south data center traffic strategies are quickly giving way to east-west approaches to support massive AI workload volume increases.

These developments are putting intense pressure on data centers to deliver more robust performance at ever-higher speeds. 800G has yet to be widely adopted and already stakeholders are eyeing 1.6T to meet anticipated needs.

It’s not just a need for more speed, but more HSE overall. We are seeing heaviest demand from across hyperscalers, NEMs, service providers, large enterprises, government and military, while sectors like financial, healthcare, education, manufacturing and chipsets also drive uptake.

Our report highlights how demand varies across industries and users, detailing early successes experienced among these customers.

Reporting from the frontlines of HSE market movements

We reveal what we have learned supporting hundreds of HSE engagements with a range of stakeholders around the globe, covering:

• Market analysis. Our report takes you behind the numbers to explore what is driving the most fast-paced HSE market to date, breaking down where demand is heaviest, what customers want, and the moves being made to serve them.
• Innovation insights. We share how leaders are pushing the boundaries of speed and efficiency, and the goals and outcomes driving new strategies and innovative pursuits.
• Success stories. Dive into real world examples of how sectors like financial, gaming, and more are benefiting from advanced HSE testing strategies, along with experiences of early adopters pushing the boundaries of what’s possible.
• What comes next. Read our predictions about what’s next for this dynamic market, including a roadmap of what to expect as strategies are defined, and actionable insights across adoption trends, performance optimization, and sustainability initiatives.

Warp-speed tech advancements point to more market disruption

We are on the cusp of a monumental leap in data transmission capabilities built upon unprecedented advancements in silicon, optical components, and transceivers. This is a critical development for data centers grappling with exponential traffic increases.

We anticipate 800G, which itself is still gaining traction, to soon be complemented by 1.6T Ethernet in an effort to meet near-term needs as AI models grow in complexity and size, requiring more bandwidth and more speed.

Our report also spotlights advancements in Remote Direct Memory Access over Converged Ethernet (RoCEv2) and the emerging Ultra Ethernet Transport (UET) standard. RoCEv2 is a crucial enabler of high-performance, low-latency networking, made possible by facilitating direct memory access between devices over the Ethernet. It’s all about serving up better data throughput and latency where they are needed.

The latest progress around the Ultra Ethernet Transport (UET) standard being developed by the Ultra Ethernet Consortium is also discussed in the context of steps being taken to modernize Ethernet for AI and high-performance computing workloads.