This article first appeared on GuruFocus.
Nvidia (NASDAQ:NVDA) is giving data centers a new way to scale. The chip giant on Friday unveiled Spectrum-XGS Ethernet, a networking platform built to connect AI factories not just within one building but across cities, countries and even continents. Shares rose 1.7% in late morning trading.
CEO Jensen Huang called the launch a cornerstone for the next phase of AI growth. The AI industrial revolution is here, he said, describing Spectrum-XGS as a scale-across system that extends beyond the traditional scale-up or scale-out models, linking massive compute clusters into what he calls giga-scale AI factories.
The tech plugs directly into Nvidia’s Spectrum-X platform and automatically manages latency, congestion and telemetry over long distances. The company said it nearly doubles the performance of its Collective Communications Library. Hyperscaler CoreWeave (NASDAQ:CRWV) is already among the first to test the system by tying its data centers together.
The timing is key. Nvidia is set to report results on Aug. 27, with Wall Street expecting $46 billion in revenue and EPS of $1.01. Investors will be watching if the networking push strengthens Nvidia’s grip on the AI infrastructure market.