Wednesday, July 17, 2024

What’s up with… Cisco, Nvidia, Altice Portugal

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In today’s industry news roundup: Cisco looks to cull swathes of jobs as it once again revamps its strategic focus; Nvidia is reportedly developing custom chips for specific market verticals, including wireless infrastructure, and has teamed up with Ericsson, while the AI chip giant’s CEO urges the world to spend more money on AI (quelle surprise!); STC and Iliad make it through to the second round of the bidding process for Altice Portugal; and much more!

As part of a plan to focus its business on “high-growth areas”, Cisco Systems is preparing a major cost reduction programme that will involve the loss of thousands of jobs at the networking equipment giant, according to a report from Reuters that cites three unidentified sources. An announcement is expected this week as Cisco is due to report its fiscal second-quarter financial results late on 14 February. For the first fiscal quarter of the current financial year, which ended 28 October 2023, Cisco reported “strong” revenues of $14.7bn (up by 8% year on year) across its product portfolio, “driven by customers’ investments  in generative AI, cloud, security, and full stack observability.” It did, though, note at the time that its sales would dip to around $12.7bn for the fiscal second quarter (which is about to be reported) as customers focused more on deployments. The vendor then expects sales to start rising again in the second half of the financial year, during which it expects to close the massive $28bn acquisition of Splunk, a move that will bolster its AI-enabled security and observability (analytics) capabilities. That acquisition, plus the recent purchases of cloud security specialist Isovalent, cloud-native mobile core developer Working Group Two and network monitoring specialist Accedian, points quite clearly to Cisco’s strategic focus on AI-enabled, secure cloud networking and observability. That these are the company’s key areas of focus was also confirmed last week during the Cisco Live EMEA event in Amsterdam, during which the vendor announced additional security and AI capabilities for its networking management platform, a collaboration with AI chip giant Nvidia to “deliver AI infrastructure solutions for the datacentre that are easy to deploy and manage,” and the launch of Motific, the vendor’s first software-as-a-service  (SaaS) product that “allows for trustworthy generative AI (GenAI) deployments in organisations.” Cisco, which ended July last year with almost 85,000 employees worldwide, previously announced a plan to cut some 4,000 jobs in November 2022, noting at the time that the move was a reflection of how it was rebalancing its business rather than because of the need to cut costs. 

Nvidia is creating a new unit to develop custom AI chips, including products specifically designed for the wireless infrastructure industry, according to this report from Reuters. The report suggests that Nvidia is already working closely with giant mobile infrastructure vendor Ericsson on the development of AI-enabled chips for mobile networks.  

The news came as Nvidia CEO Jensen Huang urged all countries to adopt their own AI infrastructure, in a bid to protect their culture while reaping the benefits of the technology’s economic potential. His comments, cited by multiple media outlets including Reuters, suggest that the company, which is the current leading developer of the underlying technology used in AI systems, is eager to expand to new markets before rivals in the chip-making market catch up. The CEO of Nvidia, which has reached a staggering market value of $1.73tn, has further stated that the company is “democratising” access to AI due to efficiency gains in AI computing. Huang also reportedly stated that the chip industry will be able to lower the cost of AI.

Saudi telco giant STC and French telco group Iliad, as well as private equity company Warburg Pincus, are through to the second round of bidding for Altice Portugal’s assets, according to a Bloomberg report. Several investment companies, including Apollo Global Management and CVC Capital Partners, are no longer in the running, it added. Altice Portugal’s owner, billionaire telecoms and media investor Patrick Drahi, is looking to sell the Portuguese business for between €8bn and €10bn, although potential suitors are finding it difficult to meet this expectation, according to Bloomberg. This news comes just after a media report suggested that Drahi is aiming to sell another of Altice’s assets – a 50% stake in XpFibre, a French fibre infrastructure wholesale operator – as part of a wider goal to trim down the company’s debt pile of around $60bn.

Global network operator spend on AI for network orchestration is expected to generate $20bn in 2028, an increase of 240% from the $6bn expected in 2024, according to the latest estimates from Juniper Research. In a new report, the research house predicts that the increased use of cellular networks by enterprises, including for smart manufacturing and autonomous vehicles, will require further investment into AI that automates key network processes. As such, use cases need high throughput, low latency and geographical coverage, while operators look to maximise network efficiency and reduce operational expenditure (opex), according to the analyst firm, which urged telcos to speed up the incorporation of AI into core networks. Its report also discovered that performance optimisation and network security will be essential going forward, accounting for more than 50% of overall global operator spend on AI by 2028. “As operators compete on the quality of their networks, AI will be essential to maximising the value of using a cellular network for connectivity. High-spending users will gravitate to those networks that can provide the best service conditions,” noted research author Frederick Savage. Find out more.

As part of its efforts to foster Japanese mobile giant NTT Docomo’s new wave of entertainment services, NTT Docomo Ventures has invested an unspecified sum in Minto, a company that develops manga and anime content. “The Docomo Group is strengthening its content business in the video and entertainment fields, and in addition to developing services such as ‘d Anime Store’ and ‘d Book,’ it is also working on the development of new content using Metaverse, Web3, etc. Taking this investment as an opportunity, we aim to create new value with the Docomo Group by strengthening our collaboration with Minto, which has strengths in content development,” noted NTT Docomo Ventures in this announcement (in Japanese).  

Australian telco Telstra has followed up its backhaul capacity collaboration with low-earth orbit satellite operator OneWeb, first announced in June 2023, by starting to connect up to 300 remote sites to high-capacity links provided by the satellite operator’s constellation, according to a report from Australian tech website ARN

– The staff, TelecomTV

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