Why Cisco is Betting on AI Innovator CoreWeave as its "Rocket Fuel"
Cisco is exploring a potential investment in CoreWeave, an AI hyperscaler valued at approximately 23 Billion USD. But what’s driving Cisco’s interest in this fast-growing AI infrastructure provider?
Cisco is exploring a potential investment in CoreWeave, an “AI Hyperscaler” now valued at approximately $23 billion. But what’s driving Cisco’s interest in this fast-growing AI infrastructure provider?
According to Bloomberg, the two companies are close to finalizing a deal, though it is not expected to be a full acquisition—at least not yet. For now, Cisco sees a strategic investment in CoreWeave as an opportunity to ride the wave of AI’s explosive growth.
CoreWeave’s CEO, Michael Intrator, has credited the AI surge, particularly the rise of ChatGPT, as “rocket fuel” for the company’s rapid growth. While Intrator initially described CoreWeave’s focus as niche, the company has quickly become a key player in AI infrastructure, offering cloud services that have been in demand since its inception in 2019, built primarily around GPU-based infrastructure.
A Shift from Crypto to AI Powerhouse
CoreWeave, like many tech companies, had humble beginnings—founded in a garage in 2017 under the name Atlantic Crypto. The company’s early focus was on providing GPUs for cryptocurrency mining, a service designed to capitalize on the booming crypto market at the time. However, when the crypto market slowed, CoreWeave pivoted to a new direction, officially rebranding in 2021 and embracing AI infrastructure as its core business.
This strategic pivot placed CoreWeave at the forefront of a burgeoning market. Today, GPUs, particularly those from Nvidia, are essential for training generative AI models. CoreWeave's rental service for these high-performance GPUs boasts 35 times faster speeds and 80% lower costs compared to legacy cloud providers. This has made CoreWeave a vital resource for enterprises looking to scale AI capabilities without the enormous expense of purchasing Nvidia GPUs outright.
CoreWeave's Growing Market and Partnerships
Although CoreWeave is primarily focused on North America, it has set its sights on international expansion, making a significant investment in Europe earlier this year. While GPUs remain the cornerstone of its offerings, CoreWeave has diversified its portfolio to include CPU computing, featuring Intel Xeon and AMD Epyc processors. It has also built its infrastructure around Kubernetes, making deployments more efficient and scalable. Still, Nvidia hardware remains central to its success, with CoreWeave being Nvidia's first Elite partner for both Compute and Visualization, underscoring its leadership in the AI space.
CoreWeave’s ties to Nvidia are further strengthened by the recent acquisition of Run
by Nvidia, another company in partnership with CoreWeave. This tight relationship highlights the synergy between the two AI powerhouses and solidifies CoreWeave’s position in the AI infrastructure landscape.
Cisco's AI Ambitions and Strategic Fit with CoreWeave
Cisco, too, has been steadily building its AI strategy, aiming to create a comprehensive AI infrastructure. Back in June, Cisco introduced its Nexus HyperFabric AI clusters, a turnkey AI stack featuring Cisco networking, Nvidia GPUs, and VAST Data’s unified data platform. CoreWeave’s infrastructure would be a natural extension of this setup, particularly for enterprises looking to train large language models (LLMs) or AI models with tens of billions of parameters—tasks that require immense computational resources.
While tech giants like Microsoft, Google, Amazon, and Meta can afford to purchase Nvidia GPUs in bulk, most enterprises cannot. This is where CoreWeave comes in, providing democratized access to high-performance AI infrastructure for large companies like Boeing, Rolls-Royce, or Siemens. These organizations may need to build, train, or fine-tune their own AI models, and CoreWeave’s infrastructure, integrated with Cisco’s solutions, could offer a more cost-effective alternative to relying on traditional hyperscalers.
Cisco’s focus on building a complete AI stack is further evidenced by its recent innovations, such as Cisco Hypershield, a new security architecture designed for both on-prem and public cloud environments. With GPUs becoming central to modern IT infrastructures, an investment in CoreWeave aligns perfectly with Cisco’s vision for the future of AI-driven computing.
By partnering with CoreWeave, Cisco is positioning itself to offer a robust AI infrastructure to companies that want the power of AI without the cost and complexity of building it themselves. As AI continues to reshape industries, Cisco’s strategic moves—coupled with CoreWeave’s cutting-edge infrastructure—could unlock new possibilities for enterprises worldwide.