Cisco Makes a Huge AI Bet with $28 Billion Splunk Acquisition
Monday saw the completion of Cisco Systems’ $28 billion all-cash purchase of cybersecurity and analytics firm Splunk.
Completion of the deal—the biggest in Cisco’s history—came months ahead of schedule and exemplifies the tremendous effort that numerous firms are making to reshape their operations around data and artificial intelligence.
The current wave of business AI adoption is not going to slow down or reverse course, according to Cisco Chief Executive Chuck Robbins and former Splunk CEO Gary Steele, who is now an executive vice president at Cisco. AI will be deeply woven into the combined companies, according to Steele.
In order to provide clients with a more proactive strategy for cybersecurity, the merged firm will employ AI to assist them in identifying connections between intelligence originating from various vendor platforms. Even though that predictive feature has been in the works for a while, the business also intends to provide additional capabilities that employ generative AI to streamline their software and make it easier to use for individuals without technical expertise.
Launched in 2003, Splunk is a dashboard that facilitates the searching, monitoring, and analysis of data produced by machines. The use of generative AI, as stated by Steele, helps to lower the learning curve, although training is still necessary. According to Steele, Splunk has its own proprietary language that requires a reasonable level of technical knowledge in order to use.
Our recently released AI tool makes it possible to automatically construct that proprietary language from English. According to Steele, you don’t need to have all the specialized expertise to get results.
Splunk’s artificial intelligence will gain from Cisco’s vast data sets, worldwide reach, and marketing and sales channels, according to Steele.
Robbins claims that generative AI will find further uses across Cisco’s operations, such as making it easier for businesses to put up security policy setup screens. “It’s quite complex. Robbins said that their customers will soon be able to express their desired security capabilities in English. They will then be able to see a policy that has been translated from their specifications.
Without replacing human operators, the software would serve as a helper, simplifying and speeding up the deployment of security policy and other resources, according to Robbins.
The firms stated their expectation that the deal would conclude by the end of September 2024 when it was announced in September 2023. It took about six months to finish the process. Following regulators’ determination that the purchase would not create obstacles to competition, the European Union granted unconditional antitrust approval to the transaction last week.
Cisco, a pioneer in networking technology, rode the wave of the 1990s telecom boom after being created in 1984. There was a period when it was the world’s most valuable firm. On March 27, 2000, Cisco’s market cap was more than $550 billion. It lost its footing when the telecom bubble burst. On Monday, Cisco was valued at approximately $199 billion.
According to Robbins, the AI age is showing no signs of slowing down. This period received a significant boost with the release of OpenAI’s generative AI-based ChatGTP in late 2022.
According to Robbins, he does not believe that clients are cutting back. He did say that companies are getting a better understanding of the pros, disadvantages, and other factors to think about when deploying AI. But he also claimed that most businesses are hesitant to use AI because they are afraid of falling behind the competition.
Robbins argues that tiny upstarts will be at a disadvantage in the age of AI compared to larger, data-rich corporations. What makes this revolution special is that it benefits established businesses who already have access to massive datasets. In the past, smaller enterprises have often been able to compete and disrupt marketplaces thanks to the big waves of technology. who remains a possibility, but according to Robbins, big data firms who make good use of AI will boost their competitive distinctiveness.
