Analysis Cisco reportedly plans to throw its weight behind CoreWeave in a deal that would boost its valuation to $23 billion and potentially cement t

Why Cisco reportedly wants in on CoreWeave's rent-a-GPU racket

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2024-10-07 06:30:03

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.