Cisco Systems Inc. recently provided more insight into the timing of its anticipated revenue from artificial intelligence (AI) orders. The networking giant expects to be a late bloomer in the AI market, with the majority of its projected $1 billion in orders turning into revenue in its fiscal year 2025.
Cisco’s Chief Financial Officer, Scott Herren, stated during an earnings call that the company’s pipeline for AI-related orders has tripled in the past 90 days. The pipeline refers to the opportunities identified by Cisco’s salesforce in their ongoing communication with customers.
While Cisco’s expectations are on a smaller scale compared to chip-making partners like Nvidia Corp. and Advanced Micro Devices Inc., who have already seen significant revenue from AI-related chip sales, Cisco remains optimistic about its future prospects in the AI industry. Herren cited the shift towards companies building their own internal infrastructures to support AI in proprietary data centers as a potential growth avenue.
Infiniband, Nvidia’s proprietary technology, currently dominates the networking-standard technology used in high-performance data centers. However, Cisco believes that ethernet, the industry-standard networking protocol, will ultimately prevail in the AI space. Cisco is confident that enterprises will opt to build their own AI infrastructure to secure their proprietary information and data.
Regarding Cisco’s partnership with Nvidia, Herren described it as a tailwind and acknowledged its potential for future revenue. While he refrained from providing specific projections, he emphasized that the partnership could be an upside force for Cisco.
Despite facing stiff competition in the AI-capable data center market, Cisco should not be written off just yet. The company’s position in the industry and its growing pipeline of AI-related orders indicate that it has the potential to capitalize on the expanding AI market.
In conclusion, Cisco may be a late bloomer in generating significant AI revenue, but its positive outlook, expanding pipeline, and strategic partnerships position the company for future success in the AI industry. As the market evolves and companies increasingly build their own AI infrastructures, Cisco’s expertise and networking capabilities could prove to be valuable assets.
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