Cisco is close to investing in Nvidia's "core son" CoreWeave at a valuation of around $23 billion

According to informed sources, Cisco Systems (CSCO.US) has agreed to invest in cloud computing provider CoreWeave, one of the hottest startups in the field of artificial intelligence. As part of this deal, the company is valued at $23 billion. Last month, CoreWeave, led by CEO Michael Intrator, was reportedly discussing a so-called secondary transaction, allowing existing shareholders such as employees to bid for shares worth $400-500 million. CoreWeave, headquartered in Roseland, New Jersey, is considering an initial public offering (IPO) as early as next year. Investors in CoreWeave include NVIDIA (NVDA.US), Magnetar Capital, Coatue Management, Jane Street, and Fidelity. CoreWeave was an early adopter of NVIDIA's data center graphics chips, ahead of the surge in demand for powerful processors to run artificial intelligence applications. It is building data centers based on NVIDIA chips to provide AI-related computing. Cisco's leadership is working hard to ensure its technology plays a key role in the rapid construction of data centers. The networking equipment provider believes that the resulting growth in data flow is creating increasing demand for its products. As background, CoreWeave was originally a cryptocurrency "mining" company that later shifted to cloud computing platform services. Since both activities fundamentally involve a high volume of purchases of NVIDIA graphics cards, the relationship between CoreWeave and NVIDIA was established many years ago. Therefore, in the eyes of the capital market, one of CoreWeave's key competitive advantages lies in its "good relationship with NVIDIA," enabling it to obtain a large number of H100 graphics cards even in times of severe shortages. For NVIDIA, the core value of supporting CoreWeave lies in disrupting the cloud computing market. Similar to NVIDIA with a market capitalization of $2 trillion, the three major U.S. cloud computing companies (Amazon AWS, Microsoft Azure, and Google Cloud) are all behemoths in the industry