Cisco Systems (NASDAQ:CSCO) Chairman and Chief Executive Officer Chuck Robbins said at JPMorgan’s Technology Conference that the company is seeing broad-based demand tied to artificial intelligence, describing the current environment as a “networking super cycle.”
In a keynote discussion with JPMorgan analyst Samik Chatterjee, Robbins said AI is increasing the need for “modern networks” and “secure networks” across hyperscalers, enterprises, sovereign clouds, neoclouds and public-sector organizations. He noted that Cisco recently raised its AI infrastructure target for the year to $9 billion from $5 billion.
Security and networking converge around AI
Robbins said the rise of agentic AI increases the need to embed security directly into networking infrastructure. He said AI agents operating independently across corporate systems will create latency and security requirements that cannot be handled solely by routing traffic through separate security appliances.
“It’s going to have to be done in the network,” Robbins said.
He pointed to Cisco’s Smart Switches, which include CPUs or DPUs built into networking products, as an example of the company’s approach. Robbins said those products can run security services in line at line speed without degradation. He estimated that Smart Switches currently represent about 5% of what customers have been buying, but said Cisco expects that share to “escalate pretty quickly.”
Silicon One and supply chain seen as competitive advantages
Robbins said Cisco’s supply chain has become a competitive differentiator, citing the company’s scale, balance sheet and ability to make advance commitments. He said Cisco has made equity investments in parts of its supply chain, including a recent investment connected to securing memory supply from Nanya.
He also said Cisco’s Silicon One strategy is central to its AI infrastructure opportunity. Without its own silicon, Robbins said, the $9 billion AI infrastructure figure “would probably be close to zero” because Cisco would otherwise be a distributor of merchant silicon.
Robbins said Cisco’s 2016 acquisition of Leaba enabled the company to build a single silicon architecture across its portfolio. By fiscal 2029, he said, all high-end systems across Cisco’s portfolio are expected to be powered by Silicon One.
He said Cisco has offered hyperscale customers flexibility in how they buy its technology, including fully integrated systems, software-only offerings or silicon-only purchases. Robbins said that approach helped improve relationships with hyperscalers after Cisco previously “missed the cloud revolution.”
Hyperscaler demand, optics and scale-across architecture
Robbins said hyperscalers face hurdles including energy availability, supply chain constraints, geography and local opposition to data center construction. He said Cisco received five hyperscaler design wins last quarter, including two in optics and three in systems.
He highlighted Cisco’s P200 chip, which he said was custom-built for “scale-across” use cases that connect multiple AI data centers. Robbins said Cisco won two hyperscalers with scale-across use cases in the third quarter and was awarded a third hyperscaler’s scale-across architecture early in the current quarter.
Robbins also said Cisco’s optics assets, including Acacia and Luxtera, have become more strategically important as AI infrastructure scales. He said pluggable optics can work with any vendor’s equipment and that optics spending is at least equal to switching spend, effectively doubling Cisco’s addressable market when combined with networking systems.
AI security risks could accelerate refresh cycles
Robbins also discussed Anthropic’s Mythos model and other advanced AI models, saying they have quickly become a top concern for CEOs. He said Cisco had access to a version of Mythos without guardrails for seven weeks before it was discussed publicly and restricted its use internally to the company’s security team.
Robbins said the model has helped Cisco identify vulnerabilities in its own code that humans may not have found, while also showing the ability to create exploits. Cisco has open-sourced a framework, or “harness,” to help customers use models in security testing, and released a white paper called “Shields Up” with recommendations for preparing for advanced AI-driven threats.
He said unpatched and end-of-support equipment across customer environments is a major concern. Robbins estimated that customer equipment past end of life represents at least “tens of billions” of dollars and potentially $100 billion to $200 billion. He said Cisco’s recently announced Cisco IQ can help customers inventory Cisco equipment and identify products past support or patching timelines.
Robbins said Cisco has not baked in assumptions about how quickly customers may refresh infrastructure in response to these risks, but said the threat environment could accelerate the cycle. He described the broader campus switching refresh as still early, using a baseball analogy: “We’re in the top of the first.”
AI’s broader impact
Robbins said Cisco is not currently seeing major disruption risk to its own software assets, which he described as focused on security, observability and network infrastructure rather than single-use SaaS applications. He said AI is more likely to improve Cisco’s software businesses than replace them.
Internally, Robbins said Cisco is using AI in customer service, legal, sales and software development. He said 27,000 employees use Cisco’s proprietary AI front end called CIRCUIT on a daily basis.
Looking ahead, Robbins predicted that companies will need to become “AI native” within five years, that security and networking will fuse over roughly the next 24 months, and that AI will drive a major productivity boom, particularly in the U.S.
About Cisco Systems (NASDAQ:CSCO)
Cisco Systems, Inc is a global technology company that designs, manufactures and sells networking hardware, software and telecommunications equipment. Its core business focuses on enabling enterprise and service-provider networks through products such as routers, switches, network security appliances and wireless systems. Over time Cisco has broadened its portfolio to emphasize software-defined networking, cybersecurity, cloud infrastructure and edge computing solutions that help organizations build and manage modern IT environments.
In addition to hardware, Cisco offers a growing range of software platforms and subscription services for network management, security, analytics and collaboration.
