Australia Data Center Networking Market Size and Share - Growth Analysis Report and Forecast Trends (2026-2035)

Market Overview

The Australia data center networking market is moving from general-purpose cloud networks towards dense, high-speed fabrics built for AI training and inference. Switching still accounts for the largest share of spend, but adapters, optics and automation software are rising fastest as GPU clusters multiply.

Three forces are shaping demand: contracted data centre capacity that is far larger than what is billing today, a federal push for sovereign AI infrastructure, and a contest between Ethernet and InfiniBand for the back-end fabric. Fibre routes and interconnection platforms add a further layer of spend between sites.

In December 2025, NEXTDC and OpenAI outlined a 650 MW sovereign AI campus in Western Sydney. In March 2026, the federal government published expectations for data centre developers, and in September 2026 Nvidia named eight Australian partners for up to 2 GW of AI infrastructure by 2027.

Key Market Trends and Insights

• Contracted capacity: NEXTDC reported in August 2026 that contracted utilisation rose to 740.1 MW on a pro forma basis, with a forward order book of 565.1 MW still to convert into billing.
• Sovereign AI campus: The NEXTDC and OpenAI plan announced in December 2025 targets a 650 MW campus at Eastern Creek, with the first stage expected in the second half of 2027.
• GPU cluster scale: Sharon AI is planning to deploy up to 68,000 Nvidia GPUs, linked by Spectrum-X Ethernet and Quantum InfiniBand, according to September 2026 reporting on the Nvidia programme.
• Faster interconnect: Megaport reported in August 2026 that 72 of its enabled locations now support 400G ports, as interconnection demand shifts towards AI and cloud workloads.

Australia Data Center Networking Market Size and Forecast

The market is shifting from cloud-era switching refreshes towards purpose-built AI fabrics, where adapters, optics and automation software carry a growing share of each project. Switches and routers remain the largest component, while network adapters and DPUs advance fastest. Ethernet leads and also grows fastest as open, multi-vendor fabrics scale, while InfiniBand stays strong in tightly coupled training clusters. AI factories and neoclouds are the fastest-growing buyers, New South Wales is the largest state, and Queensland grows quickest as new campuses move from plan to build.

Key Takeaways: Australia Data Center Networking Market

AI Fabrics Lift Spend Across the Decade

Revenue is on course to rise by about 3.7 times, from AUD 1,150.00 million in 2025 to AUD 4,263.30 million in 2035 at a 14.0% CAGR. Contracted campus capacity, sovereign AI programmes and faster port speeds make demand project-led and recurring.

Adapters, Ethernet and AI Buyers Lead Growth

Switching is the largest component, but network adapters and DPUs grow at an estimated 19.0% CAGR and Ethernet fabrics at an estimated 16.0% through 2035. AI factories and neoclouds, at an estimated 25.0%, are the fastest-growing buyer group.

HPE Lifts Its Data Centre Networking Outlook

HPE raised its networking outlook in October 2026, citing AI demand and Juniper integration. The signal matters for Australian buyers weighing a wider vendor field beyond the long-standing leaders.

• Networking revenue growth of roughly 18% to 23% projected for fiscal 2027
• Annual run-rate savings target raised to USD 800 million by end of fiscal 2028
• Data centre networking growth in the 50% range projected through fiscal 2029

Australia Data Center Networking Market Report Summary

Key Insight

AI cluster build-outs, sovereign infrastructure policy and the move to faster fabrics shape demand. Switching holds the broad base of spend, while adapters, optics and AI buyers grow fastest.

Key Trends in the Australia Data Center Networking Market

The Australia data center networking market is being reshaped by sovereign AI programmes, new long-haul fibre and the arrival of vendor reference designs built for local GPU clusters.

September 2026 - Nvidia Signs Eight Australian Partners for Up to 2 GW of AI Infrastructure

• On 14 September 2026 IT Brief reported Nvidia's programme with Firmus, Sharon AI, IREN, Megaport, ResetData, CDC, NEXTDC and AirTrunk, targeting up to 2 GW by 2027.
• Sharon AI named both Spectrum-X Ethernet and Quantum InfiniBand as the networking behind up to 68,000 planned GPUs.
• Megaport's software-defined network connects the Latitude.sh compute used for inference workloads.

June 2026 - Vocus Announces a Sydney to Melbourne Fibre Route for AI Traffic

• Vocus unveiled a route of about AUD 500 million with up to 3,456 fibre pairs, reported on 30 June 2026.
• The ducted design allows cables to be added later without new civil works, and service is scheduled to start in 2029.
• Macquarie Asset Management and Aware Super are named as backers.

March 2026 - Government Publishes Expectations for Data Centre and AI Developers

• On 23 March 2026 the Australian Government released expectations covering national interest, energy, water, skills and local capability.
• The expectations create no new legal duties but guide how Commonwealth regulatory assessments are prioritised.
• Data sovereignty and grid support favour in-country networking and operations over offshore control.

February 2026 - Sharon AI and Cisco Launch a Secure AI Factory in Sydney

• Announced on 23 February 2026, the deployment uses 1,024 Nvidia Blackwell Ultra GPUs hosted in NEXTDC facilities.
• Cisco supplies Nexus Hyperfabric under its Nexus One management plane, with VAST Data providing storage.
• Sharon AI expects to add more clusters in 2026 and beyond.

Key Insight

Policy and partnerships now move together. Reference designs, new fibre routes and sovereignty rules push buyers towards locally hosted, high-speed fabrics, while vendors compete to be the default design.

Recent Market Developments in the Australia Data Center Networking Market

Recent developments, presented from the most recent, show the Australia data center networking market moving from announcements into contracted capacity, tenant leases and vendor guidance.

October 2026 - HPE Raises Networking Outlook on AI Demand and Juniper Savings

• IT Brief reported on 2 October 2026 that HPE projects fiscal 2027 networking revenue growth of roughly 18% to 23%.
• HPE lifted its annual run-rate savings target from Juniper to USD 800 million by the end of fiscal 2028.
• It expects data centre networking to grow fastest among its segments, driven by large GPU clusters.

September 2026 - Anthropic Leases the First Stage of Western Downs Digital Park

• IT Brief reported on 22 September 2026 that Anthropic will lease the first stage through its Australian subsidiary.
• Zerra DC is developing the Queensland campus, with Macquarie Capital as financial adviser to the consortium.
• The site connects through the existing Braemar substation, with a battery-backed power conditioning system in the first phase.

August 2026 - NEXTDC Reports Its Largest Contracting Year

• NEXTDC announced FY26 results on 27 August 2026, with contracted utilisation up 202% to 740.1 MW pro forma.
• Record capital expenditure of AUD 3,397 million was reported, with guidance for AUD 5.25 billion to AUD 5.75 billion in FY27.
• A forward order book of 565.1 MW signals sustained demand for fabric equipment as halls fill.

December 2025 - NEXTDC and OpenAI Outline a Sovereign AI Campus in Western Sydney

• Reported on 5 December 2025, the plan covers 650 MW at Eastern Creek and an AUD 7 billion programme.
• The first stage is expected in the second half of 2027, subject to approvals, with liquid cooling for dense GPU racks.
• A GPU supercluster of this scale requires large back-end fabrics, optics and adapters.

Key Insight

Recent events show capacity being contracted and leased faster than it is energised. Vendors are updating guidance for AI demand, pointing to equipment orders arriving before halls go live.

Australia Data Center Networking Industry Segmentation

The Expert Market Research’s report on the Australia Data Center Networking Market offers a detailed analysis of the market based on the following segments.

Market Breakup by Component

• Switches and Routers
• Optical Transceivers and Cabling
• Network Adapters and DPUs
• Network Software and Services
• Others

Switches and Routers lead revenue, helped by Arista reporting quarterly revenue of just over USD 3 billion on 4 August 2026. Optical Transceivers and Cabling follow demand for faster ports, with Megaport enabling 400G at 72 locations by August 2026. Network Adapters and DPUs grow fastest at an estimated 19.0% CAGR, as Spectrum-X and InfiniBand adapters are specified for each GPU server. Network Software and Services cover automation and support, including Cisco's Nexus Hyperfabric in the February 2026 Sydney deployment. Others covers test equipment and structured cabling.

Market Breakup by Fabric Technology

• Ethernet
• InfiniBand
• Fibre Channel
• Others

Ethernet leads on installed ports and grows fastest at an estimated 16.0% CAGR, with the IEEE 802.3dj standard for 800G and 1.6T links expected to complete in late 2026, according to a January 2026 industry analysis. InfiniBand holds a firm niche in tightly coupled training clusters, and Sharon AI pairs it with Spectrum-X Ethernet in the September 2026 Nvidia programme. Fibre Channel persists in storage networks for enterprise and government. Others covers proprietary and optical circuit interconnects.

Market Breakup by Data Centre Type

• Hyperscale and Cloud Operators
• AI Factories and Neoclouds
• Colocation and Interconnection Providers
• Enterprise and Government
• Others

Hyperscale and Cloud Operators lead spend, with AirTrunk and CDC named in September 2026 as capacity providers for dense AI workloads. AI Factories and Neoclouds grow fastest at an estimated 25.0% CAGR, as Firmus announced on 2 March 2026 a multi-year contract for about 18,400 Nvidia GB300 GPUs in Melbourne. Colocation and Interconnection Providers buy fabrics and exchange platforms, and Megaport's revenue rose 37% in the year to June 2026. Enterprise and Government reflects the March 2026 sovereignty expectations.

Market Breakup by Region

• New South Wales
• Victoria
• Queensland
• Western Australia
• South Australia
• Others

New South Wales dominates through Sydney's carrier density and the Eastern Creek campus planned by NEXTDC, growing at an estimated 13.0% CAGR. Victoria follows at 14.0%, with the Melbourne Firmus site and the Vocus fibre route announced in June 2026. Queensland is the fastest-growing state at an estimated 18.0%, as Anthropic leased the first stage of Western Downs Digital Park in September 2026. Western Australia grows at 15.0%, where CDC plans up to 200 MW at Maddington. South Australia grows at 17.0% on IREN's proposed 800 MW Bundey campus. Others covers Tasmania, the ACT and the Northern Territory at 14.5%, led by Firmus's Tasmanian campus.

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If you choose to purchase the full report at a later stage, the amount already paid will be adjusted, and you will only need to pay the remaining balance.

Competitive Landscape in the Australia Data Center Networking Market

Competition combines global switching and silicon vendors, optical and interconnect specialists and Australian platform operators. Entry barriers include reference-design status, supply allocation, local integrator support and compatibility with GPU server platforms.

Cisco

Cisco, headquartered in San Jose, California, supplies Nexus data centre switches, Silicon One based platforms and the Nexus Hyperfabric automation system. In February 2026 it launched Australia's first Cisco Secure AI Factory with Sharon AI and Nvidia in Sydney, using 1,024 Blackwell Ultra GPUs, VAST Data storage and NEXTDC facilities. Cisco has extended the Secure AI Factory architecture to edge sites in 2026.

Nvidia

Nvidia, headquartered in Santa Clara, California, supplies Spectrum-X Ethernet, Quantum InfiniBand, adapters and DPUs alongside its GPUs. In September 2026 it expanded its Australian programme to eight partners targeting up to 2 GW by 2027, with its DSX platform packaging compute, networking, software and reference designs. Partners include Firmus, Sharon AI, IREN, Megaport, ResetData, CDC, NEXTDC and AirTrunk.

Arista Networks

Arista Networks, headquartered in Santa Clara, California, sells Ethernet switches and the CloudVision management platform for cloud and AI data centres. Its second-quarter 2026 revenue, reported on 4 August 2026, was just over USD 3 billion, up 37.7% year on year. Arista raised full-year guidance to about 40% growth and cites its Etherlink switches for scale-out and scale-across AI fabrics, an architecture relevant to Australian multi-site campuses.

Megaport

Megaport, headquartered in Brisbane, Queensland, operates a software-defined network that links customers to clouds and data centres. In the year to June 2026 it reported revenue of AUD 312.2 million, up 37%, results announced on 20 August 2026. It acquired Latitude.sh, a GPU compute provider, with the deal announced in November 2025, and now has 72 locations enabled at 400G.

Other players operating in the Australia data center networking market include HPE Networking, Ciena, Dell Technologies, Broadcom, and Vocus, alongside system integrators, optics distributors, colocation operators and carriers supporting fabric, interconnect and managed network services across Australia.

Key Insight

Competition rests on reference designs, supply allocation, GPU platform interoperability and local integration skills rather than price. Global leaders hold the switching base, while platform operators compete on connectivity.