Sadana argued that unlike traditional networking where an IT person can just plug a cable into a port and it works, AI networking requires intricate, custom solutions. The core challenge is creating highly optimized, efficient networking infrastructure that can support massive AI compute clusters with minimal inefficiencies. How NextHop is looking to change the game for hyperscale networking NextHop AI is working directly alongside its hyperscaler customers to develop and build customized networking solutions. “We are here to build the most efficient AI networking solutions that are out there,” Sadana said. More specifically, Sadana said that NextHop is looking to help hyperscalers in several ways including: Compressing product development cycles: “Companies that are doing things on their own can compress their product development cycle by six to 12 months when they partner with us,” he said. Exploring multiple technological alternatives: Sadana noted that hyperscalers might try and build on their own and will often only be able to explore one or two alternative approaches. With NextHop, Sadana said his company will enable them to explore four to six different alternatives. Achieving incremental efficiency gains: At the massive cloud scale that hyperscalers operate, even an incremental one percent improvement can have an oversized outcome. “You have to make AI clusters as efficient as possible for the world to use all the AI applications at the right cost structure, at the right economics, for this to be successful,” Sadana said. “So we are participating by making that infrastructure layer a lot more efficient for cloud customers, or the hyperscalers, which, in turn, of course, gives the benefits to all of these software companies trying to run AI applications in these cloud companies.” Technical innovations: Beyond traditional networking In terms of what the company is actually building now, NextHop is developing specialized network switches

A potential ‘oversupply position’ In a new research note, TD Cowan analysts reportedly said that Microsoft has walked away from new data center projects in the US and Europe, purportedly due to an oversupply of compute clusters that power AI. This follows reports from TD Cowen in February that Microsoft had “cancelled leases in the US totaling a couple of hundred megawatts” of data center capacity. The researchers noted that the company’s pullback was a sign of it “potentially being in an oversupply position,” with demand forecasts lowered. OpenAI, for its part, has reportedly discussed purchasing billions of dollars’ worth of data storage hardware and software to increase its computing power and decrease its reliance on hyperscalers. This fits with its planned Stargate Project, a $500 billion, US President Donald Trump-endorsed initiative to build out its AI infrastructure in the US over the next four years. Based on the easing of exclusivity between the two companies, analysts say these moves aren’t surprising. “When looking at storage in the cloud — especially as it relates to use in AI — it is incredibly expensive,” said Matt Kimball, VP and principal analyst for data center compute and storage at Moor Insights & Strategy. “Those expenses climb even higher as the volume of storage and movement of data grows,” he pointed out. “It is only smart for any business to perform a cost analysis of whether storage is better managed in the cloud or on-prem, and moving forward in a direction that delivers the best performance, best security, and best operational efficiency at the lowest cost.”

There is also the fact that many people working with AI are not IT professionals, such as professors, biochemists, scientists, doctors, clinicians, and they don’t have a traditional enterprise department or a data center. “It’s run by people that wouldn’t really know, nor want to know, what storage is,” he said. While the new AI Data Server is a Dell design, PEAK:AIO has worked with Lenovo, Supermicro, and HPE as well as Dell over the past four years, offering to convert their off the shelf storage servers into hyper fast, very AI-specific, cheap, specific storage servers that work with all the protocols at Nvidia, like NVLink, along with NFS and NVMe over Fabric. It also greatly increased storage capacity by going with 61TB drives from Solidigm. SSDs from the major server vendors typically maxed out at 15TB, according to the vendor. PEAK:AIO competes with VAST, WekaIO, NetApp, Pure Storage and many others in the growing AI workload storage arena. PEAK:AIO’s AI Data Server is available now.

SoftBank’s announcement suggests Ampere will collaborate with other SBG companies, potentially creating a powerful ecosystem of Arm-based computing solutions. This collaboration could extend to SoftBank’s numerous portfolio companies, including Korean/Japanese web giant LY Corp, ByteDance (TikTok’s parent company), and various AI startups. If SoftBank successfully steers its portfolio companies toward Ampere processors, it could accelerate the shift away from x86 architecture in data centers worldwide. Questions remain about Arm’s server strategy The acquisition, however, raises questions about how SoftBank will balance its investments in both Arm and Ampere, given their potentially competing server CPU strategies. Arm’s recent move to design and sell its own server processors to Meta signaled a major strategic shift that already put it in direct competition with its own customers, including Qualcomm and Nvidia. “In technology licensing where an entity is both provider and competitor, boundaries are typically well-defined without special preferences beyond potential first-mover advantages,” Kawoosa explained. “Arm will likely continue making independent licensing decisions that serve its broader interests rather than favoring Ampere, as the company can’t risk alienating its established high-volume customers.” Industry analysts speculate that SoftBank might position Arm to focus on custom designs for hyperscale customers while allowing Ampere to dominate the market for more standardized server processors. Alternatively, the two companies could be merged or realigned to present a unified strategy against incumbents Intel and AMD. “While Arm currently dominates processor architecture, particularly for energy-efficient designs, the landscape isn’t static,” Kawoosa added. “The semiconductor industry is approaching a potential inflection point, and we may witness fundamental disruptions in the next 3-5 years — similar to how OpenAI transformed the AI landscape. SoftBank appears to be maximizing its Arm investments while preparing for this coming paradigm shift in processor architecture.”

The new AIP members will “further strengthen the partnership’s technology leadership as the platform seeks to invest in new and expanded AI infrastructure. Nvidia will also continue in its role as a technical advisor to AIP, leveraging its expertise in accelerated computing and AI factories to inform the deployment of next-generation AI data center infrastructure,” the group’s statement said. “Additionally, GE Vernova and NextEra Energy have agreed to collaborate with AIP to accelerate the scaling of critical and diverse energy solutions for AI data centers. GE Vernova will also work with AIP and its partners on supply chain planning and in delivering innovative and high efficiency energy solutions.” The group claimed, without offering any specifics, that it “has attracted significant capital and partner interest since its inception in September 2024, highlighting the growing demand for AI-ready data centers and power solutions.” The statement said the group will try to raise “$30 billion in capital from investors, asset owners, and corporations, which in turn will mobilize up to $100 billion in total investment potential when including debt financing.” Forrester’s Nguyen also noted that the influence of two of the new members — xAI, owned by Elon Musk, along with Nvidia — could easily help with fundraising. Musk “with his connections, he does not make small quiet moves,” Nguyen said. “As for Nvidia, they are the face of AI. Everything they do attracts attention.” Info-Tech’s Bickley said that the astronomical dollars involved in genAI investments is mind-boggling. And yet even more investment is needed — a lot more.

The IBM Storage Scale platform will support CAS and now will respond to queries using the extracted and augmented data, speeding up the communications between GPUs and storage using Nvidia BlueField-3 DPUs and Spectrum-X networking, IBM stated. The multimodal document data extraction workflow will also support Nvidia NeMo Retriever microservices. CAS will be embedded in the next update of IBM Fusion, which is planned for the second quarter of this year. Fusion simplifies the deployment and management of AI applications and works with Storage Scale, which will handle high-performance storage support for AI workloads, according to IBM. IBM Cloud instances with Nvidia GPUs In addition to the software news, IBM said its cloud customers can now use Nvidia H200 instances in the IBM Cloud environment. With increased memory bandwidth (1.4x higher than its predecessor) and capacity, the H200 Tensor Core can handle larger datasets, accelerating the training of large AI models and executing complex simulations, with high energy efficiency and low total cost of ownership, according to IBM. In addition, customers can use the power of the H200 to process large volumes of data in real time, enabling more accurate predictive analytics and data-driven decision-making, IBM stated. IBM Consulting capabilities with Nvidia Lastly, IBM Consulting is adding Nvidia Blueprint to its recently introduced AI Integration Service, which offers customers support for developing, building and running AI environments. Nvidia Blueprints offer a suite pre-validated, optimized, and documented reference architectures designed to simplify and accelerate the deployment of complex AI and data center infrastructure, according to Nvidia.  The IBM AI Integration service already supports a number of third-party systems, including Oracle, Salesforce, SAP and ServiceNow environments.