The funding from Cisco is reportedly on the verge of completion. Credit: JHVEPhoto / Shutterstock.

Cisco Systems is nearing an investment in US-based CoreWeave, a cloud-computing provider specialising in AI, in a deal that values the startup at $23bn, Bloomberg reported citing undisclosed sources.

Under the leadership of CEO Michael Intrator, CoreWeave has been engaged in a secondary transaction, allowing current shareholders, including employees, to sell between $400m and $500m of their equity.

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The transaction is on the verge of completion, sources who wished to remain anonymous told the publication.

CoreWeave is also said to be considering an initial public offering (IPO) as early as next year.

Both companies declined to comment on the latest development.

Investors in CoreWeave include NVIDIA, Magnetar Capital, Coatue Management, Jane Street, and Fidelity.

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The company was one of the first to adopt NVIDIA’s graphics chips for data centres to offer processors capable of running AI applications.

CoreWeave is now expanding its data centres utilising NVIDIA’s chips to enhance AI-related computing services.

In August, Cisco announced plans for workforce reductions that could affect thousands, marking the second round of layoffs this year, to refocus on high-growth areas such as cybersecurity and AI.

The number of job cuts may be on par with or exceed the 4,000 roles eliminated in February 2024.

In June, Cisco’s global corporate venture investment division Cisco Investments announced a new $1bn fund dedicated to AI startups.

This initiative is designed to nurture the AI startup ecosystem and promote the development of reliable and secure AI technologies.

As part of this AI fund, Cisco has already made strategic investments in several AI-focused companies, including Mistral AI, Cohere, and Scale AI.