Cisco executives were working overtime this week to make the case that Cisco shares are an AI play for investors. Unfortunately, it didn’t work.with initial investments in Cohere, Mistral AI, and Scale AI. The company also announced a technology partnership with Nvidia to launch a new line of AI infrastructure, the Nexus HyperFabric AI Cluster.. At best, these were public relations and investor relations moves designed to draw more investors into Cisco stock on the back of an AI bubble.
Cisco made the AI fund announcement as part of its package of hoopla at its annual Cisco Live event, held this week in Las Vegas. Putting AI front-and-center was of course a priority: You can’t go to a technology conference these days without being hit on the head with the AI sledgehammer. The major AI infrastructure players—companies such as Microsoft, Nvidia, and Super Micro—have shown direct linkage between AI and revenue, putting themselves in the position of AI leaders. They are moving billions of dollars of hardware, software, and services linked to AI technology. Cisco hasn’t demonstrated that it’s doing that yet. It will have to that with Splunk and Nexus HyperFabric AI. Investors so far are in wait-and-see mode.
“We think it is an advantage for Cisco that it can sell the individual Hyper Scalers whatever they want, including Cisco One chips, grey box co-designed Switches, and Cisco branded Switches,” wrote Michael Genovese, an analyst with Rosenblatt Securities, after the Cisco analyst day.At Cisco Live, the company had other announcements, such as better integration between its AppDynamics products and newly acquired Splunk, which is a smart move that benefits customers.
“All the C-suite executives used to ask why aren’t we in the cloud … “ said Robbins in the keynote. “Everybody’s going to do that on steroids on AI. Everybody’s going to want to know, what’s our plan? We want to do great things with AI and we want to do it in a responsible way.”