Cisco CEO Chuck Robbins and Gary Steele, CEO of Splunk, discusses the rise of AI in cybersecurity, completing the deal to buy Splunk and how both companies are being integrated. They spoke to Bloomberg's Alix Steel and Romaine Bostick.
Bloomberg Audio Studios, podcasts, radio news. Let's talk about Cisco. It's betting big on Splunk to build its AI portfolio, recently closing the acquisition of the software company and now announcing plans to invest one billion dollars in startups working on what it calls secure and reliable AI services. Cisco and Splunk unveiling its latest AI enhancements at its annual user conference in Las Vegas dot com. So let's head out there right now. Chuck Robbins, the chair and CEO of Cisco, joining us right now alongside Gary Steel, now the president of Cisco's go to market business, And let's talk about the security aspects of this, because this is really right in your wheelhouse. Chuck is right in the wheelhouse of what Splunk does, and it's what every corporate executive right now is talking about when it comes to AI. Not just how we profit off this, but how do we keep it safe?
Yeah, first of all, thanks for having us, and you're you're exactly correct. I think that you know AI has introduced both a set of increased threats as the bad actors around the world actually utilize AI to create more effective attacks and to create more realistic attacks on our customers. At the same time, we can use AI and we are and we will increasingly over the coming months, quarters, and years to actually help our customers defend themselves more effectively. And we think if we do it right, we can actually give our customers a hand up against the bad actors as we look to the future, and we think this acquisition was a big aspect of actually helping us do that.
Gary, talk about that here. I know this is probably more momentous for you than maybe it was for Chuck, who's kind of an old hand at this, but you're now under that umbrella here. I mean, Cisco is a behemoth. I mean, I mean the company that you kind of took over there and sort of help facilitate this deal. That was a big deal. It was a big deal for investors. It's going to be a big deal for clients at Spunk and more importantly clients at Cisco.
Yeah.
Absolutely, and super excited to be part of the Cisco team. What I'm most excited about, frankly, is the journey that we've been on driving amazing innovation and helping our customers leverage AI to have a better security posture. That journey just gets accelerated autder Cisco, and so I couldn't be more excited. We've got some great announcements announcements here at our user conference around AI and how we're bringing AI into the hands of the practitioner to make their lives easier and their jobs better, and all of that work that we've been doing really just gets accelerated being part of Cisco.
Hey, Chuck, I'm interested that the one criticism about the deal is that it'll be diluted to Cisco earnings because of the lack of synergies. What in terms of expense synergies. Why is that?
Well, first of all, we've all we said from the very beginning that this deal was based on revenue synergies and not call synergies. And when you spend twenty eight billion dollars, I think you want to be a little careful. We close this deal probably six months earlier than we actually expected to, so we're easing into this. We're actually going to spend the next twelve months really focused on the integration, focused on continuing the innovation that the Splunk team is delivering, that the Cisco team is delivering. We've already announced several integrations. We announced them at RSA, we announced them at Cisco Live last week, We're announceding them at dot COF this week. And our view is that we are going to continue to accelerate the value that our customers are going to see from this acquisition, and we think that's more important. There will be cost synergies, Okay, we just start't focused on those in the very near term.
Okay, So you're just not there yet, Chuck. Is that is that what I'm reading from you?
That's that's one way of putting it. Okay, very good, There, we'll get there.
Well, you'll get there. You're not there yet.
Gary.
What can you do with Cisco that you couldn't do as a standalone company. What is the opportunity that now this splunk can be provided.
Yeah, it goes to a few things. One is we get the visibility all the way through the network. So as you think about helping companies improve their security posture or being able to take that network data that's rich to bring into our environments to ultimately identify lateral movement in networks, critical to help customers protect themselves against threat actors, and more broadly, we think about digital resilience as a critical mission that we've been on. So how do you keep systems up and running from a security perspective and an operational perspective That invisibility is something that no other company in the world can deliver, and Splunk plus Cisco is a really unique combination where we can deliver tremendous value to customers as a result.
Chuck, I am curious here about what's next. I mean, we talk about this idea of the integration of Splunk and I know this is a big deal. It's going to take some time to really integrate it in there, but there's got to be something else on the horizon. Is there anything else that you're considering.
Well, we're continuing to look at anything that can help bring greater value to our customers. I mean we you know, we've had this M and A strategy for years that focused around strategic fit, financial balance, and cultural alignment. And when you find those three things and there's great value that we can deliver for our customers, then we're interested and you can think about other opportunities and security. Although I will say that our internal team at both Cisco and the team at s Plunk have been innovating over the last eighteen to twenty four months at a pace that we had in prior so. But you think about security, you think about some of the emerging AI stuff that's going on, You think about observability. Anything that helps us deliver greater insights from all the data that our customers are trying to navigate would be areas that we would focus on, both organically as well as inorganically.