Analysis Cisco reportedly plans to throw its weight behind CoreWeave in a deal that would boost its valuation to $23 billion and potentially cement the network giant’s place in the rent-a-GPU outfit’s cloud.
According to a Bloomberg report citing unnamed sources familiar with the matter, the deal comes as CoreWeave CEO Michael Intrator reportedly nears completion of a secondary transaction which would allow existing shareholders and employees to tender $400-500 million of their holdings.
Investments in CoreWeave reached a fever pitch this year after the Roseland, New Jersey-based startup raised $1.1 billion in a Series C funding round in May and raked in another $7.5 billion in debt financing that same month using its GPU infrastructure as collateral.
Cisco’s potential investment is by no means surprising, and likely, for the same reason that Nvidia is funding GPU clouds like CoreWeave and Applied Digital: Without datacenters, there’s nowhere to put their tech. And so even a small investment in a bit-barn operator can pay dividends in sales of GPUs and networking kits down the line.
It goes without saying that if Cisco is willing to plow significant capital into CoreWeave, they’re getting something out of the deal, likely in the form of a commitment to deploy their hardware and software stacks. Winning over CoreWeave would certainly go a long way to helping Switchzilla realize the $1 billion worth of AI product orders by the end of its 2025 fiscal year it’s previously projected.
It remains to be seen how big a role Cisco’s networking kit could play in future CoreWeave compute clusters. That’s because Nvidia’s compute architecture heavily favors its InfiniBand network tech, at least for the compute fabric used to distribute workloads like training jobs across multiple nodes.
While Ethernet dominates the datacenter as a whole, as we’ve previously discussed, this isn’t the case in AI compute fabrics where InfiniBand remains king accounting for roughly 90 percent of deployments.
That’s not to say InfiniBand is a requirement for using Nvidia GPUs at scale. For customers that don’t want to maintain multiple networking stacks, Nvidia also offers its Spectrum-X line of Ethernet-based switches and SuperNICs.
Ethernet is certainly an option. However, just going off CoreWeave’s website, its existing datacenters are using InfiniBand for the compute fabric.
Then, where does that leave Cisco? Well, even if CoreWeave sticks with InfiniBand for its compute fabric, it still needs networking for management, orchestration, and storage, which don’t require the kind of low-latency, low-loss qualities InfiniBand commands a premium for.
For all we know, CoreWeave could already be using Cisco kits for these tasks. The networking giant declined to discuss its investment plans, and CoreWeave didn’t immediately respond to a request for comment.
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Cisco’s equipment could also be used as a supplement to InfiniBand as well. Given the considerable demand