Jun 5, 2025

The company from Ra'anana aiming at Nvidia's market Ido Susan credit: Eyal Izhar DriveNets has an alternative solution to Nvidia for "AI factories," and a $1 billion order book for the next five years. DriveNets was founded to replace Cisco among telecommunications providers, but found itself competing with a bigger player: Nvidia. The company from Ra’anana was set up a decade ago, but for most of the time it has kept a low profile, well below the media’s radar. DriveNets’ two founders, serial entrepreneur Ido Susan and his partner Hillel Kobrinsky, recoil from media interviews. Susan sold Intucell to Cisco for $475 million more than a decade ago, after raising just $6 million, and became a multi-millionaire at just 27, and a shareholder is several real estate developments in central Israel. Kobrinsky, a former brigadier general in the IDF Armored Corps, founded Interwise and sold it to AT&T. He had a period in politics, being one of the founders of the Yair Lapid’s Yesh Atid party, and serving as the party’s secretary general in its first years. In 2015, after making his fortune from the exit to Cisco, and working at Cisco’s development center for two years, Susan chose to found DriveNets and compete with Cisco, with the aim of making telecommunications giants such as AT&T and Verizon swap their Cisco and Juniper routers for those of DriveNets. Inspiration from the cloud Ironically, he drew his inspiration from the cloud. Susan aspired to break up the old-fashioned, complicated telecommunications networks with their large routers, which were generally limited by the size of the telecommunications cabinets. Instead, the idea behind DriveNets came from server farms, or data centers: to set up high-speed computing boxes in each of which is installed a powerful communications chip, that can be put together like Lego blocks to create powerful virtual routers on demand. These Lego blocks, known in the company as "white boxes", can be stored together under one roof, or split between different installations up to 80 kilometers apart, and still work together with precise synchronization as a communications router that manages all data communications for the telecommunications providers. A week ago, however, DriveNets released a modest announcement that did not receive wide coverage, but which could cause an earthquake in a completely different industry, artificial intelligence. It could be significant for telecommunications and AI chip providers such as Nvidia, or major cloud providers such as Google, Amazon, and Microsoft. RELATED ARTICLES DriveNets announced that it was serving a new customer, a fairly anonymous US company, WhiteFiber, which began life setting up server farms for bitcoin mining, and recently set up an AI farm in Iceland. WhiteFiber is DriveNets’ first customer in a new area that has become popular in the past year, neoclouds, that is, companies that provide AI processing services, to a large extent replacing the giants Google, Amazon and Microsoft, which are having difficulty in meeting the high pace of demand for AI services. Neocloud companies equip with thousands of graphics processors for hire. Among them are better known names such as CoreWeave, which held a successful IPO in April and now has a market cap approaching $50 billion, and Nebius, the growing AI company founded by Israeli Yandex founder Arkady Volozh. The new, modest-looking partnership indicates steadily growing demand for DriveNets’ communications networks from server farms for AI processing, the largest of which are known as "AI factories". "Globes" has learned that DriveNets already serves one of the major technology companies offering cloud and AI services, and that it has several more customers and orders in AI and communications estimated to amount to an order book worth $1 billion over the next five years. The company did not respond to an approach from "Globes". Came to the market by chance According to industry sources, DriveNets came to the AI market entirely by chance, after a customer asked to test the capabilities of its processing technology for communications between graphics processors. The trial was crowned with success, but the company chose to focus on telecommunications providers and to forego the market. Only the high demand for AI processing led the company to give up one of its first telecommunications products and to focus on AI factories - large server farms that specialize in AI processing - as a growing market. Thus in addition to installations in the hundreds of millions of dollars for customers such as AT&T, Comcast, NTT, and KDDI, the company plans to expand its activity with neoclouds and large and mid-size cloud and AI providers. n order to compete with Nvidia, which thus far has dominated the AI processing market, DriveNets and its competitors, such as Cisco and Arista Networks, have led the development of technologies designed to provide a similar level of reliability. Nvidia rules the AI roost for several reasons: graphics processors with the best performance - Hopper and Blackwell processors; the most reliable communications protocol for AI processing, InfiniBand and its processors, which it inherited with the acquisition of Israeli company Mellanox for $6.9 billion; and the AI CUDA development environment. DriveNets overcame the biggest obstacle to competing with Nvidia by means of Ethernet, a rival communications protocol to that of Nvidia. Ethernet is open and cheap, but in the past was considered inferior to Nvidia’s InfiniBand. In recent years, it has been promoted more by Cisco and Arista. In response, Nvidia also launched the open protocol for AI processing two years ago, with chips developed in Israel. Furthermore, DriveNets demonstrated that it was possible to bring down the cost of AI infrastructure significantly by leaving out Nvidia chips and obtaining a similar result at a far lower price with processors from Nokia, Cisco, and Broadcom. The default choice is Broadcom chips originally developed by Israeli company Dune which Broadcom acquired, that bear Israeli names: Jericho, Ramon, and Qumran. The proof of concept of Broadcom for operating AI centers through companies like Israel’s DriveNets expands its hold on this market at the expense of Nvidia’s growth, especially after Broadcom was revealed as the supplier of the core AI chip for giants such as Google, Samsung and Apple. Nvidia is not taking this lying down. In the past two years, it has made Cisco, DriveNets’ main rival, its sole chips partner in communications, and upgraded its support for the Ethernet protocol. In fact, the construction of the Israel-1 supercomputer in Yokne’am is its first project in this field, subsequently copied by Elon Musk for his supercomputer, xAI Colossus, based on a similar structure. DriveNets is a small player in a market in which Nvidia is first, and Arista, which has a market cap of $114 billion, is second, with huge customers such as Microsoft and Meta. DriveNets, which employs 500 people, and in its last fund raising round in 2022 was valued at $3.1 billion, according to Pitchbook, intends to take third place. Published by Globes, Israel business news - en.globes.co.il - on May 28, 2025. © Copyright of Globes Publisher Itonut (1983) Ltd., 2025.