Behind one of the most impressive growth statistics in the latest financials released by Nvidia lies a distinctly Israeli story. The company’s networking division, which has its development center in Israel and largely rests on technologies developed by Yokne’am-based Mellanox, acquired by Nvidia five years ago, recorded peak revenue in the first quarter of the company’s 2026 fiscal year of $5 billion.
This is 64% more than in the previous quarter, and 56% higher than in the corresponding quarter of 2025. The jump in revenue makes the networking division one of Nvidia’s main growth engines, second only to the graphics chips division (GPU), and ahead of the gaming and autonomous vehicle divisions.
The networking division is responsible for the development of technologies that enable computers to "talk" to each other at ultra-high speeds, a vital capability in the AI era, in which hundreds, and even thousands, of processors have to work together. If the processors are the brain, the networking division provides the nervous system, ensuring that data flow fast and efficiently between the computing components.
The division’s growth mainly derives from two product lines mostly developed in Israel: the Spectrum-X series designed for AI systems, enabling huge models to run on servers with maximum efficiency; and NVLink technology, which facilitates the connection of dozens of graphics processors into one enormous computing unit, a capability critical for training advanced GenAI models.
These two products are already installed in important AI projects, among others in Nvidia’s Israel-1 supercomputer in Israel, and Colossus, the supercomputer of Elon Musk’s company xAI. In the conference call after the release of its financials, Nvidia revealed that its Spectrum-X products alone had reached an annual rate of sales of $8 billion, an indication of the growing demand for network infrastructure adapted for AI.
In March 2019, Nvidia announced the acquisition of Mellanox, founded by Eyal Waldman, for $7 billion, one of the largest ever acquisition deals for an Israeli company. It later emerged that the sale process had been very competitive, and that seven companies bid for Mellanox.
Published by Globes, Israel business news - en.globes.co.il - on May 29, 2025.
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