Cisco is firing on all AI cylinders: build, partner, buy, invest

Cisco is firing on all AI cylinders: build, partner, buy, invest

Launching a new AI fund from Cisco Investments should enable startups worldwide to bring good and secure AI solutions to market. It is one of the ways Cisco wants to be and stay relevant in the age of AI. Read all about Cisco’s strategy for AI in this article.

Cisco may not be the first company you think of when it comes to relevance in the age of AI. First of all, it is not a new player with a hugely disruptive new technology. In addition, it has an image of being quite an unwieldy organization. It’s not easy to make adjustments, something that in itself is important to remain relevant in a world as rapidly developing as that of AI. Yet Cisco’s new Chief Stategy Officer, Mark Patterson, made a point during Cisco Live that the company does have ambitions to take on a central role. He calls that organic and inorganic innovation in the AI era.

Four pillars: build, partner, buy and invest

To grab and maintain a key position in AI, Cisco approaches it from a very broad perspective. Patterson calls that build, partner, buy and invest. The build part is evident, just look at the new GenAI stack it launched today together with Nvidia and VAST Data. It also makes perfect sense that Cisco is playing and grabbing an important role in this area. As the world’s largest infrastructure player and fast-growing security player, it can take care of connecting and securing AI environments and workloads.

That same announcement today also immediately signals the second part of Patterson’s four-stage rocket toward AI relevance. Cisco can’t do everything itself, nor does it want to. That’s why it partners with others who can do certain things (much) better. In this case, Nvidia and VAST Data. The same is true in other areas. For example, Cisco does not go out and build LLMs itself, but partners with Mistral AI and Cohere.

The buying pillar is one that Cisco is more than a little familiar with. The company made its first acquisition in 1993 and hasn’t stopped since. It has made many larger acquisitions, with Splunk being by far the largest, and many more small ones. Below is a picture of some acquisitions in the field of AI:

The above picture also immediately shows the last pillar, that of investments. Cisco has also been doing that for just under 30 years. For example, it is the largest investor in the most recent investment round of around $1 billion for Scale AI. This is a company that provides training data for AI applications such as self-driving cars, robotics, AR/VR and more. So it is clearly taking investing in AI seriously.

New $1 billion AI investment fund

To reinforce the latter, if it wasn’t already clear that Cisco is taking AI very seriously, the company is launching a new investment fund today. Patterson also immediately promises that “there is much more to come.” Whether he means that the fund will become bigger than $ 1 billion, or that Cisco will come up with even more ways to bolster its AI ambitions, isn’t entirely clear to us. Included in this fund are the investments in Scale AI we already mentioned above. It also invested some of it in Mistral AI and Cohere. 200 million of the $1 billion has already been allocated.

In part, this investment fund is also simply necessary for Cisco. It was not tremendously early in making strides in AI. For example, many of its recent acquisitions were still heavily influenced by its collaboration portfolio. However, Cisco’s size and the scalability of investment that comes with it also makes it an ideal investor. That suits a company of this size and with the history that comes with it (including the necessary legacy) a lot better than frenetically trying to move tremendously smoothly with all the whims and vagaries of an emerging market.

Whether Cisco succeeds in becoming and remaining a major hub in the AI market through this strategy remains to be seen, of course. That will depend in part on the success of the acquisitions it has made and will make (not least that of Splunk). Another part is the succes of its investments in other companies. This is not even taking into account what it wants to develop itself in terms of infrastructure for AI and AI-driven security solutions, for example. Here, Outshift plays an important role, by the way. That incubator enables Cisco to “cheat a bit,” as Vijoy Pandey, who is in charge of Outshift, puts it. On the one hand, it can develop new products quickly and in a modern way. On the other hand, it also has the scale of Cisco behind it to allow it to mature quickly.

We already agree with one thing Patterson told us during Cisco Live: “Cisco is one of the few companies that can actually have this strategy.” We are very curious to see how this strategy will be executed.