New AI innovations and benchmarks are announced daily, often multiple times a day, and enterprises are eager to harness their potential. However, bridging the divide between laboratory successes and practical applications in enterprise pipelines can be challenging.
To bolster the startup ecosystem and fuel the growth of generative AI and large language models (LLMs), Cisco Investments has launched a $1 billion AI investment fund. The company is also backing high-valuation startups like Cohere, Mistral AI, and Scale AI, all of which are currently in the midst of fundraising efforts.
Cisco leaders emphasize that this initiative transcends mere financial investment. The company aims to collaborate and co-innovate with these startups, positioning itself as an agnostic provider in the AI landscape. Cisco CEO Chuck Robbins articulated this vision during his speech at Cisco Live in Las Vegas, noting that a billion-dollar investment has become commonplace and is often met with indifference. He stated, “We’re thinking about it slightly differently.”
Cisco is focused on creating "unique characteristics" in its partnerships, rather than simply waiting for a return on investment. Robbins highlighted the company’s commitment to co-development activities that will yield innovative solutions to aid enterprises in navigating the AI transition.
The generative AI market is projected to surge from $20.9 billion this year to nearly $137 billion by 2030, with some forecasts suggesting an economic injection of $1 trillion into the U.S. economy over the next decade. Cisco, like other tech giants, has made significant AI acquisitions and investments, including the recent $28 billion acquisition of the observability platform Splunk.
To date, Cisco has committed nearly $200 million from its $1 billion fund. The company is supporting Mistral AI, founded by former Meta and Google DeepMind scientists, which is targeting the U.S. market with its Gen AI models for enterprises. Mistral is reportedly closing in on a $600 million funding round, pushing its valuation to $6 billion. Its Mistral 7B model boasts 7.3 billion parameters and claims superior performance to competitors like Llama in several benchmarks.
Cisco’s investment in Cohere is part of a $450 million funding round alongside Nvidia, Salesforce Ventures, and PSP Investments, bringing its valuation to $5 billion. Cohere is noted for developing security-focused LLMs and retrieval-augmented generation capabilities.
Additionally, Cisco backs Scale AI, a company specializing in training and validation for AI applications, valued at $13.8 billion after closing a $1 billion Series F round in May. According to Cisco SVP of Corporate Development Derek Idemoto, investment criteria include addressing the evolving needs of a diverse customer base and solving complex technical challenges, which often lead to groundbreaking advancements.
“Teams and cultural fit are essential,” Idemoto added. “Our investments are more than financial transactions; they represent long-term partnerships, and we actively engage with our portfolio companies, providing guidance, support, and access to our network.”
During his keynote, Robbins noted that AI is advancing at an unprecedented pace, comparing it to the emergence of other transformative technologies like cloud computing and 5G. He recalled how the tech industry spent years discussing the deployment of 5G.
While the first generation of AI has existed for decades, he emphasized that generative AI is rapidly evolving. “I think AI is going to be that on steroids,” Robbins asserted, indicating that interest in AI will inspire a rush to adopt its solutions.
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