Cisco is reportedly close to investing in Nvidia-backed AI startup CoreWeave

By Ciara Linnane

Deal will value New Jersey-based cloud-computing provider at $23 billion, Bloomberg reports

Cisco Systems Inc. is close to investing in artificial intelligence startup CoreWeave in a deal that values the company at $23 billion, Bloomberg reported Friday, citing people with knowledge of the matter.

Roseland, N.J.-based CoreWeave already counts AI giant Nvidia Corp. (NVDA), Magnetar Capital, Coatue Management, Jane Street and Fidelity as investors. The cloud-computing provider was an early adopter of Nvidia's graphics chips for data centers, said the report.

The company is building out data centers based on Nvidia's chips to offer AI-related computing.

Cisco (CSCO) is seeking to ensure that its technology serves a role in the rapid build-out of data centers. The provider of networking equipment is confident the resulting growth in the movement of data will boost demand for its products.

CoreWeave has been discussing a secondary transaction that would allow existing shareholders, including employees, to tender $400 million to $500 million of their holdings, Bloomberg reported separately last month. That deal is close to being completed, the people said.

CoreWeave is also considering going public next year via an initial public offering.

CoreWeave and Cisco declined to comment to Bloomberg.

Cisco's stock was flat premarket but has gained 3.8% in the year to date, while the S&P 500 SPX has gained 19.5%.

-Ciara Linnane

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10-04-24 0745ET

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