Neoclouds Are Making Waves—and Cisco Is Serving to

The fast adoption of generative AI and agentic AI is spurring demand for AI infrastructure and the necessity for a wealthy ecosystem that may ship the entire AI lifecycle. On this setting, a brand new breed of AI cloud suppliers—also known as neoclouds—has emerged as agile, technically subtle gamers constructing extremely specialised AI cloud providers to serve new markets and desires. At Cisco, we’re devoted to working with the complete vary of ecosystem contributors. This contains the standard hyperscalers, in addition to these newer neocloud suppliers and foundational mannequin builders. It additionally contains communications service suppliers, colocation suppliers, and sovereign cloud suppliers that increase AI cloud providers by delivering the AI internet hosting, safe ubiquitous connectivity, and trusted infrastructure and information providers enterprises want.

The AI infrastructure market: The surging frontier

The demand for AI infrastructure is rising at an exponential fee. Complete international information middle IT gear spend over the 5 years between 2025 and 2030 is predicted to achieve as a lot as 4.7 trillion {dollars}.¹ This encompasses servers, accelerators (XPUs), networking, optics, and storage. At present, it’s estimated that hyperscalers are chargeable for over 60% of this infrastructure funding, whereas neoclouds are chargeable for about 17%, which is predicted to develop to over 30% over the subsequent ten years.² The opposite ecosystem members and enterprises themselves have gotten chargeable for an growing proportion of the AI infrastructure buildout as inferencing and agentic AI, sovereign cloud, and edge AI turn into extra mainstream. In response to McKinsey, demand for AI information middle capability will account for 70% of whole information middle demand by 2030 and is the principle driver of a rising infrastructure deficit.³ Neoclouds are quickly stepping as much as fill the hole and are making huge strikes to drive new enterprise fashions and know-how improvements that concentrate on the readiness, resilience, differentiation, and profitability of their AI cloud service choices.

Three approaches to AI cloud providers

Neocloud suppliers are usually not a monolith. They make the most of varied enterprise fashions to ship AI infrastructure providers that cater to totally different use circumstances and verticals. Consumption fashions are altering quickly, from bare-metal choices to full-stack {hardware} and software program along with “as a service” choices. We are able to categorize supply and consumption fashions into a number of approaches that mirror various enterprise necessities for scalability, flexibility, price, efficiency, and information sovereignty. Particular person suppliers are selecting the approaches that finest swimsuit their enterprise priorities and buyer wants.

Three main approaches have emerged:

• Devoted cloud AI IaaS: On this mannequin, enterprises decide to utilizing devoted AI infrastructure inside a neocloud’s information middle for a set time period. The advantages of this strategy embody assured capability, higher efficiency isolation, and infrequently vital price financial savings in comparison with on-demand pricing. It’s finest fitted to predictable and long-running AI workloads, corresponding to large-scale mannequin coaching or steady inference duties, and for organizations with constant AI useful resource necessities or people who want unique entry to compute sources.
• Public AI cloud providers: With this mannequin, neoclouds allow enterprise prospects to entry shared swimming pools of AI-optimized computing sources, corresponding to GPUs and tensor processing models (TPUs). Prospects solely pay for the sources they eat with out long-term commitments. This “pay-as-you-go” strategy presents most flexibility and scalability, making it very best for experimental workloads, improvement, testing, or bursty AI duties the place demand is just not constant.
• Hybrid and edge AI IaaS: This mannequin extends deploying and managing AI infrastructure throughout a mixture of public cloud environments, on-premises or colocation information facilities, and edge places. It brings AI compute nearer to the place information is generated or consumed, addressing wants like low-latency processing, information sovereignty, and regulatory compliance. This mannequin is especially useful for purchasers that require real-time choice making, corresponding to industrial web of issues (IoT), autonomous autos, or localized analytics.

Seven causes neoclouds can rely on Cisco for AI infrastructure

Whatever the service mannequin adopted, neocloud suppliers require a strong, scalable, and safe basis. Many are discovering that Cisco presents the partnering focus, complete portfolio, and imaginative and prescient essential to succeed. Listed here are seven key benefits to partnering with Cisco:

1. Complete, in-house AI infrastructure portfolio: Cisco presents the broadest homegrown AI infrastructure portfolio each inside and between information facilities. This contains built-in full-stack safe AI manufacturing facility options, AI-optimized compute, AI networking, optics, and information middle interconnect options, in addition to safety and observability for AI. Advantages for neoclouds embody architectural flexibility, streamlined procurement, constant operations and help, and a extremely sturdy provide chain.
2. Architectural and operational flexibility: With Cisco, neocloud suppliers have the flexibleness to decide on the reference structure and working setting that finest meets their technical necessities. Whether or not they wish to adhere to the NVIDIA Enterprise Reference Structure (ERA), the NVIDIA Cloud Accomplice (NCP) reference structure, Cisco Cloud Reference Structure, or just wish to construct their very own—we offer the mandatory flexibility and validated designs to speed up deployment.
3. Business-leading AI networking materials: Cisco AI Networking delivers scalable front-end and back-end materials inside information facilities, along with information middle interconnect and scale-across networks between information facilities. Neoclouds can select between the confirmed reliability of Cisco NX-OS for operational consistency, or SONiC for open networking requirements.
4. Expanded partnership with NVIDIA: Our expanded partnership with NVIDIA permits NVIDIA Spectrum-X know-how integration on Cisco Silicon One–based mostly switches and Cisco N9100 Sequence Switches that incorporate NVIDIA Spectrum-X Ethernet swap silicon—all unified beneath the Nexus working mannequin for seamless integration with Cisco Nexus Dashboard. Nexus is already well-known inside many neoclouds who’ve established it of their front-end computing networks.
5. Highly effective and various associate ecosystem: Cisco companions with a broad ecosystem to ship the very best options and worth. This contains compute and accelerator companions like NVIDIA, AMD, and Intel; storage companions; software program companions; liquid cooling companions; system integrators; and plenty of others.
6. Finish-to-end safety and observability: Safety and reliability are prime issues for enterprises deploying AI. Cisco Safe AI Manufacturing facility with NVIDIA supplies a full-stack resolution with safety built-in at each layer. With Splunk, Cisco supplies Observability for AI for deep visibility into each layer of the setting, together with GPU infrastructure, GenAI, LLM outputs, and AI functions. Cisco presents unmatched safety and observability for AI deployments, serving to neoclouds defend their infrastructure and information.
7. Unified silicon structure with Cisco Silicon One: Cisco Silicon One is a groundbreaking switching and routing silicon structure. This single structure is the inspiration used throughout a broad vary of networks, from back-end and front-end AI networks to scale throughout, information middle interconnect, wide-area networks, and edge. It delivers superior congestion management and cargo balancing for AI materials and is programmable to help rising requirements.

Constructing the way forward for AI cloud providers with Cisco

Cisco is uniquely positioned to help neocloud suppliers’ AI infrastructure wants throughout all their service fashions. By offering cutting-edge know-how—from Cisco Silicon One and NVIDIA Spectrum-X silicon-based switching to Cisco UCS compute to built-in safety and observability stacks—Cisco permits neoclouds to ship scalable AI providers with pace, reliability, and effectivity.

Because the market continues to evolve, Cisco supplies the experience, go-to-market help, and options to assist neoclouds speed up time to service, maximize the effectivity of GPU clusters, and finally safe a foundational function within the burgeoning AI ecosystem.

1. The price of compute: A $7 trillion race to scale information facilities, McKinsey & Firm, April 2025. 

2. AI Infrastructure Survey, McKinsey, June 2025. (Inside Cisco survey) 

3. AI energy: Increasing information middle capability to fulfill rising demand, McKinsey & Firm, October 2024.