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Giving $1B Some Perspective | Cisco Investments

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Giving $1B Some Perspective

Janey Hoe's avatar

Janey Hoe

Today, Cisco announced a $1B global investment fund to expand and develop secure and reliable AI solutions. Over the past several years, we’ve made over 20 AI-focused acquisitions and investments.

At Cisco Investments, one of our functions that sets us apart is our Portfolio Development Team. We amplify the companies in which we invest in three ways:

  • Enabling them to sell with Cisco, giving them access to our customers and our sales teams

  • Helping them to sell to Cisco by getting them in front of the right stakeholders

  • Providing the opportunity to sell through Cisco’s world-class channel ecosystem that includes tens of thousands of partners

Leading investments and portfolio development, I am as excited as anyone by today’s news, eager to welcome new AI startups to our portfolio. 

I had the opportunity to sit down with the leadership of Cisco Corporate Strategy, Development, and Incubation, which includes Cisco Investments, to discuss the $1B investment fund and our outlook on AI. Here’s what Cisco Executive Vice President and Chief Strategy Officer, Mark Patterson, and Corporate Development Senior Vice President, Derek Idemoto, had to say.

Why is now the right time to make this kind of commitment to AI?

Mark: This is a major inflection point. AI is reshaping every industry and the world around us at a truly unprecedented pace, putting greater emphasis on how businesses globally interact and rely on technology. We know that the Global AI market is expected to double in size in the next three years to more than $500B. Enterprises, including Cisco, have an incredible opportunity to leverage Gen AI to significantly enhance their products and services and better serve their customers and end users. 

Cisco has a valuable role to play in AI, and we are invested in driving industry AI advancement and adoption to ensure organizations can safely, reliably and responsibly capture maximum value from AI. In our recently published Cisco AI Readiness Index we captured data from over 8,000 global leaders responsible for AI integration and deployment in their organizations. While 95% of respondents have an AI strategy in place, only 14% are fully ready to deploy and integrate AI at scale in their businesses. In addition to building essential technology to power and secure AI, we are committed to investing in the broader AI ecosystem to more effectively meet our customers' needs.

Derek: Cisco's $1 billion investment in AI is a clear reflection of our belief in the transformative power of this technology and our commitment to leading this wave of innovation. Recognizing that AI is poised to redefine every aspect of our lives, we are seizing the moment to ensure that we not only adapt to this new age but also drive its progression. This investment represents our dedication to a multi-pronged strategy that includes building robust partnerships through strategic investments and acquisitions to supplement our organic innovation efforts. 

This fund is designed to empower our customers as they navigate the complexities of AI integration by providing access to a network of innovative solutions within the Cisco ecosystem. It's not just about immediate advancements; it's about laying the foundation for Cisco to be the trusted partner in AI for the long haul. By investing now, we're positioning Cisco at the forefront of AI technology, ensuring that we continue to deliver value and leadership in this dynamic field for years to come.

There are a lot of emerging AI companies right now. As investors, how do we see through the fog to identify investment opportunities? What qualities do we look for?

Derek: Our approach as a corporate venture arm is unique; we look through both a strategic and financial lens, ensuring that each investment aligns with our long-term vision as much as it does with our financial goals.

In evaluating potential investments, we're guided by several key considerations:

Does it address the real and evolving needs of our diverse customer base? We prioritize investments in companies that are developing innovative solutions to these needs, complementing our existing product portfolio, fulfilling the current and future demands of the customers we serve.

We target companies that are solving complex technical challenges, as these endeavors often lead to groundbreaking advancements. Equally critical to their technology is the team behind it; we seek out exceptionally talented individuals capable of turning tough problems into opportunities.

Lastly, cultural fit is essential. Our investments are more than financial transactions; they represent long-term partnerships. We actively engage with our portfolio companies, offering guidance, support, and access to our network. It's crucial that these companies not only reflect Cisco's values but also share our commitment to mutual growth and success. Ultimately, we invest with the aim of creating a symbiotic ecosystem where our portfolio companies thrive and contribute to Cisco's strategic goals, unlocking synergies that can only emerge when there's a shared vision and understanding.

Mark: Just to add to what Derek said, we have a long history of staying close to our customers and partners to understand their unique needs, perspectives, and priorities. Understanding their most relevant use cases – both constraints and opportunities – is critical. In addition, tapping into the broad and deep technical expertise that exists in Cisco and developing a clear point of view of how the technology will evolve and change in tandem with the infrastructure in which customers have already invested is essential in identifying the right opportunities.

After acquiring Splunk, making several key investments within AI, and establishing a billion-dollar fund for future investments, what’s the future opportunity for Cisco and AI?

Mark: Put simply, we connect and protect the AI era. Only Cisco brings together extensive experience with AI-scale infrastructure and domain expertise in building AI across networking, security, and observability. Data is the fuel for AI, and we deliver visibility and insights across the widest breadth and scale of data in the industry. All built on a foundation of trust and responsible AI. 

We believe we are well positioned to be the best strategic partner for our customers as they look to build, secure, and power AI. I am excited about the future and helping enterprises harness the power of secure, reliable and trustworthy AI on a global scale. 

As part of today’s news, we welcome Cohere, Mistral, and Scale AI to our Cisco Investments portfolio. We firmly believe these investments will advance our customer’s AI readiness and complement our AI strategy. I am looking forward to working with them as part of our portfolio. AI is reshaping every industry and the world around us at a truly unprecedented pace, and we are excited to lead this journey to AI readiness.