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Cisco's Splunk buy could be partially motivated by its GenAI capabilities
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Amazon is spending money on Anthropic as part of its bid to own the unshakable foundations of AI
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"Its a GenAI moment," Appledore Research's Roman Ferrando said
Mobile World Congress Las Vegas – Appledore’s artificial intelligence (AI) analyst Roman Ferrando told Silverlinings at the Mobile World Congress show in Vegas that recent massive spends by Amazon Web Services (AWS) and Cisco recently could have a lot to do with AI, telco AI, and the network of the future.
Cisco laid out a whopping $28 billion for security software firm Splunk. In the company's official blog post about the acquisition, Cisco CEO Chuck Robbins described Splunk as one of the world’s best data platforms.
Talking to Silverlinings on the show floor in Vegas, Ferrando noted that Splunk’s acquisition price represented a 31% premium over what the company was worth. He thinks that Cisco is, in part, investing in Splunk’s generative AI capabilities to use in future network products.
He said that Cisco will use Splunk’s GenAI engine to help configure a network, using Cisco switches and routers, of course, by translating complex configuration commands into plain English in the future.
“If you look ahead 10 years,” Ferrando said, "You can see operators using GenAI to reduce their day-to-day operational expenditure (Opex)."
Cisco is looking ahead to use GenAI to create “clean and simple” network configuration and management tools that users can control with simple English rather than complex commands, he contends.
Amazon’s big Anthropic spend
Similar thinking lay behind Amazon’s surprise investment of up to $4 billion in OpenAI rival startup Anthropic on Monday, Ferrnado said. Amazon plans to invest, even though Anthropic already counts rival Google as an investor.
“It’s a GenAI moment!” the analyst exclaimed. He compares it the early internet and dotcom boom which saw the development of lots of browsers.
The difference between the dotcom boom and the AI movement, the analyst explained, is that the major building blocks of AI are being being put in place right now, largely by the hyperscalers and other massive companies, and can’t be easily — or in fact, ever — replaced by new entrants.
“Building what they have takes a lot of money and a lot of data,” Ferrando said.
Amazon already has a GenAI service called Bedrock. Anthropic has given a long-term commitment to supply foundational models for Bedrock.
Clearly Amazon is investing in Anthropic to help spread its AI wings further as Google, Meta and Microsoft look to capture share in this fast growing market.
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