• Thu. Jul 25th, 2024

As The Usage Of AI Expands, Cisco Will Purchase Splunk In A $28 Billion Transaction, Bolstering Defenses.

ByNishat Manzar

Sep 22, 2023

Splunk, a cybersecurity company, will be acquired by Cisco Systems Inc. for $28 billion, making it Cisco’s biggest purchase to date. The action will boost Cisco’s defenses against future security attacks and further its efforts in software and AI-powered data analysis.

Cisco Systems Inc. has revealed that it will pay $28 billion to acquire cybersecurity company Splunk. The transaction will be Cisco’s largest acquisition to date. A significant investment in software and data analysis using artificial intelligence would result from Cisco purchasing Splunk.

With its most recent agreement, Cisco would be taking a step toward stepping up its defenses against possible security vulnerabilities that might be exacerbated by the widespread usage of artificial intelligence. 

The next wave of AI-enabled security and observability will be driven by our combined skills, according to Cisco Chair and CEO Chuck Robbins, according to the AP.

“We will assist in increasing the security and resilience of organizations of all sizes, from threat detection and response to threat prediction and prevention.”

According to a statement released by the firms on Thursday, Cisco will pay $157 per share in cash, which represents a 31% premium over Splunk’s prior Wednesday closing price. According to a Bloomberg estimate, the acquisition amount equals nearly 10% of Cisco’s market worth. 

In an effort to rely less on its recognizable networking hardware, Cisco has been growing its software and services division. 

The equipment that serves as the foundation of computer networks has historically provided the Silicon Valley company with the majority of its revenue, but that has been changing recently. Cisco presented the advancements it has made in security and artificial intelligence technologies last month.

The transaction is possibly a gamble on artificial intelligence just as much as it is on the software and data security industries. 

Splunk introduced a new range of AI products earlier this year, claiming that they would, among other things, help businesses identify and address data abnormalities more quickly. According to the announcement released on Thursday, the combination gives the firms’ AI solutions “substantial scale” and more data visibility.

The deal, which is anticipated to completion by the end of the third quarter of 2024, was authorized by the boards of both firms. It still need shareholder approval for Splunk.

In early Thursday morning trade, shares of Cisco Systems Inc. decreased by about 4% while those of Splunk rose by more than 20%.