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Nvidia is quietly building a multibillion-dollar behemoth to rival its chips business

Nvidia CEO Jensen Huang was years ahead of the market when he pushed the company to start tinkering with building AI-specific chips back in 2010, more than a decade before the current buzz around AI. A similar move in 2020 — doubling down on data center networking with a strategic acquisition — has led to one of the company’s most lucrative and quickly growing divisions, but with little fanfare.

In just a few years, Nvidia’s networking business, designed to connect data centers, has grown into the company’s second-largest revenue driver behind compute. Last quarter, it reported $11 billion in revenue, a year-over-year increase of 267%, and brought in more than $31 billion for the full year, according to Nvidia’s most recent earnings.

Driven by growth in AI processing, the division includes tech like NVLink, which powers communication between GPUs on a data center rack; Nvidia InfiniBand Switches, an in-network computing platform; Spectrum-X, the ethernet platform for AI networking; and co-packaged optics switches, among others.

Together, Nvidia’s networking business includes all the tech needed for building an “AI factory,” a data center designed for training AI models.

Kevin Cook, a senior equity strategist at Zacks Investment research, told TechCrunch that Nvidia’s networking business is one of the most impressive new segments from the company. “[Nvidia’s networking business] reports $11 billion for the quarter; that number is greater than Cisco’s networking business, almost as big as the full-year estimates,” Cook said, adding it does in one quarter what Cisco’s business does in a year.

And yet — the business segment doesn’t draw the same attention as the company’s chip business, which is significantly larger. It also doesn’t get as much fanfare as the company’s gaming business, it’s original bread-and-butter business, which is nearly three times smaller.

The origin of Nvidia’s networking business comes from Mellanox, a networking company founded in Israel in 1999 that Nvidia acquired in 2020 for $7 billion.

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Kevin Deierling is a senior vice president of networking at Nvidia. He joined the company through the acquisition of Mellanox. Deierling told TechCrunch that people not knowing about Nvidia’s networking business could be his fault for doing a bad job of marketing it — but he doesn’t like that answer.

“People think of networking as just, ‘I got a printer, and I need to connect to it,’” Deierling said. “Jensen said this the first day when he acquired us, he said the data center is the new unit of computing. Networking is a lot more than just moving the smaller amounts of data between a compute node; it’s actually a foundation.”

While Deierling said he didn’t really understand why Huang bought the company when he did — he gets it now. Having a networking business alongside its GPU business allows the company to sell its chips with the tech that they work best with.

“When Jensen bought Mellanox in 2020, he saw that was the missing piece to make GPUs a complete package,” Cook, the Zack’s analyst, said.

Deierling added that he thinks another aspect of Nvidia’s networking success is that it only sells the tech as a full-stack solution, as opposed to individual components, and it doesn’t actually sell the tech itself, but rather through its partners.

“I can’t think of other companies that have [the] full-stack capabilities that we have,” Deierling said. “We are really different. We build the full compute stack, fully integrated stack, and then we go to market through all of our partners.”

Nvidia just announced a whole new slew of updates to its networking system during Huang’s keynote address on March 16 at the company’s annual Nvidia GTC technology conference. The company launched the Nvidia Rubin platform, which includes six new chips to power an “AI supercomputer.” Nvidia also announced a new Nvidia Inference Context Memory Storage platform and more efficient Nvidia Spectrum-X Ethernet Photonics switches, among other products.

“It’s no longer a peripheral to connect the printer, some other slow I/O device,” Deierling said about networking. “It’s fundamental to the computer. In the old days, we had what was called the back lining inside the computer. Today, the network is the back lining of the AI factory, and it’s super important.”

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Doss raises $55M for AI inventory management that plugs into ERP

Enterprise resource planning (ERP) systems are often described as a company’s “central brain” because the software connects different departments — including finance, HR, and inventory — into a single database where everyone shares the same information.

In recent years, a new crop of AI-powered ERP startups, such as Rillet and Campfire, has emerged hoping to replace legacy offerings like NetSuite. These companies claim that traditional ERPs are clunky, expensive, and time-consuming to implement.

However, according to Doss co-founder and CEO Wiley Jones, many new AI ERPs lack robust inventory management, the process of ensuring that the data on physical goods remains synced with the accounting ledger.

Doss claims to solve this by providing an AI-native inventory management layer that integrates with existing accounting systems, whether traditional ERPs or ones built by AI-based startups.

On Tuesday, Doss announced that it raised a $55 million Series B co-led by Madrona and Premji Invest, with participation from Intuit Ventures. Other new and existing inventors in the round include Theory Ventures, General Catalyst, Contrary Capital, and Greyhound Capital.

Doss, founded in 2022, originally focused on a core accounting product similar to those offered by AI-native startups like Rillet and Campfire. But last year, the startup decided instead of competing with these companies, “we would rather partner with them, and play a different game,” Jones told TechCrunch.

Jones explained that AI-native ERP companies manage accounts receivable, accounts payable, and other finance functions, but most don’t offer procurement and inventory management that integrates with accounting workflows.

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“We’re building a lot of the traceability for the supply chain, but through the lens of plugging into a finance and accounting partner,” Jones said.

The company’s main partners include Rillet and Campfire. Many clients also use Doss in conjuction with Intuit’s QuickBooks.

“The reason that they work with us is that [physical goods management] is not something that they’re likely going to build as a core competency without putting in a lot of energy and effort,” Jones said.

Doss’ core customer base consists of mid-market consumer brands, typically generating between $20 million and $250 million in top-line revenue. One such customer is Verve Coffee Roasters, a high-end specialty coffee brand.

The startup sees itself as competing with traditional ERPs. But these players are not sitting ideal in the age of AI, either. NetSuite, for instance, has recently introduced its updated AI ERP. It also competes with other agentic procurement startups such as Didero.

While Jones admits that selling two ERP systems, one for accounting and another for inventory management like Doss, “is a hard sell,” he says that legacy ERPs are so hard to implement that many customers are choosing to have two newer, AI-powered systems.

“I think it’s going to be a very intense fight inside of mid-market that ultimately will be determined by whoever rebuilds their architecture to be most legible and usable for agents,” Jones said.

Editor’s Note: The story corrected the list of Doss’ partners.

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Crunchyroll confirms data breach after hacker claims unauthorized access

Anime streaming service Crunchyroll has confirmed a data breach involving customer service ticket information following an incident with a third-party vendor, after a hacker claimed to have accessed user data and internal systems.

The streaming site, which Sony acquired from AT&T in 2020 for $1.18 billion, operates as a joint venture between U.S.-based Sony Pictures Entertainment and Japan-based Aniplex. Crunchyroll has more than 2,000 titles in over 12 languages and serves 15 million subscribers worldwide, per its website.

Reports of a threat actor claiming access to Crunchyroll user data surfaced online this week, with a hacker alleging that they obtained data about millions of users.

Crunchyroll said it is investigating the claims.

“Our investigation is ongoing, and we continue to work with leading cybersecurity experts,” the company said in a statement to TechCrunch, adding that it has not identified evidence of ongoing unauthorized access.

Separately, materials shared with TechCrunch by a cybersecurity-focused account, International Cyber Digest, indicate the attacker may have gained access to Crunchyroll’s Zendesk support system. Screenshots we have seen appear to show the company’s internal Slack messages and stolen support data, apparently stolen by hacking an employee at Telus Digital, an outsourcing giant that handles customer support for Crunchyroll. The hacker allegedly stole customer support ticket data until early 2025, at which point their access was revoked.

The cybersecurity account said the hack was separate from a recent breach affecting Telus Digital, which the company confirmed last week.

Crunchyroll did not respond to a follow-up question about whether the third-party vendor relates to its support partner, Telus Digital.

Telus Digital did not respond to requests for comments.

The hacker told BleepingComputer they had downloaded about eight million support ticket records from Crunchyroll’s systems, including roughly 6.8 million unique email addresses, though the claims have not been independently verified. The hacker also told the publication they gained access on March 12 after compromising an Okta single sign-on account belonging to a Crunchyroll support agent.

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BKR Capital raises $14.5M (so far) to invest in Black founders

Canada’s BKR Capital announced Monday that its Fund II has closed CA$20 million (around $14.5 million), bringing it closer to its CA$50 million target.

This fund is looking to back “high-growth technology companies led by founders from the Black community, building solutions for the future of work, living, and global connectivity,” managing partner Lise Birikundavyi told TechCrunch. The firm is mainly looking at Canada but is open to backing select companies globally. The average check size will be between $250,000 and $1.5 million, she said.

Birikundavyi said that almost 70% of the Black population in Canada is first- or second-generation immigrants, “resulting in founders who build globally from day one, unlocking early access to international markets and creating a structural advantage in scaling.”

Though many U.S. firms have shied away from openly advertising a mission that could be perceived as diversity, equity, and inclusion (DEI), Birikundavyi said her Toronto-based fund doesn’t share those exact fears. What’s happening in Canada is less of a DEI rollback and more of a reframing, she said, where investors are “prioritizing discussion on performance,” even though “the underlying opportunity remains unchanged.”

She added, “Expanding access to overlooked founders continues to surface high-quality deals, making this less about DEI and more about arbitrage investing.” She believes investors in Canada still see “inclusive investment” as good for the ecosystem and full of potentially lucrative business opportunities.

The firm’s thesis is rooted in the belief that “overlooked markets and diverse lived experiences can unlock outsized venture opportunities,” Birikundavyi said. The firm launched in 2021 and raised $22 million for its Fund I (which Birikundavyi said is performing better than at least 75% of the other funds launched around the same time). She said BKR Capital hopes to make its final close for Fund II in December and invest in 25 companies.

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