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 atmosphere, 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 total 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 charge. Whole international information heart IT gear spend over the 5 years between 2025 and 2030 is predicted to succeed in as a lot as 4.7 trillion {dollars}.¹ This encompasses servers, accelerators (XPUs), networking, optics, and storage. At the moment, it’s estimated that hyperscalers are answerable for over 60% of this infrastructure funding, whereas neoclouds are answerable for about 17%, which is predicted to develop to over 30% over the following ten years.² The opposite ecosystem members and enterprises themselves have gotten answerable for an rising proportion of the AI infrastructure buildout as inferencing and agentic AI, sovereign cloud, and edge AI grow to be extra mainstream. In accordance with McKinsey, demand for AI information heart capability will account for 70% of complete information heart demand by 2030 and is the primary 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 usually are not a monolith. They make the most of numerous enterprise fashions to ship AI infrastructure providers that cater to completely 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 will categorize supply and consumption fashions into a number of approaches that replicate numerous enterprise necessities for scalability, flexibility, value, efficiency, and information sovereignty. Particular person suppliers are selecting the approaches that finest swimsuit their enterprise priorities and buyer wants.

Three major approaches have emerged:

• Devoted cloud AI IaaS: On this mannequin, enterprises decide to utilizing devoted AI infrastructure inside a neocloud’s information heart for a set time period. The advantages of this strategy embrace assured capability, higher efficiency isolation, and infrequently vital value financial savings in comparison with on-demand pricing. It’s finest suited to predictable and long-running AI workloads, resembling 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 assets.
• Public AI cloud providers: With this mannequin, neoclouds allow enterprise prospects to entry shared swimming pools of AI-optimized computing assets, resembling GPUs and tensor processing models (TPUs). Prospects solely pay for the assets they eat with out long-term commitments. This “pay-as-you-go” strategy provides most flexibility and scalability, making it best for experimental workloads, growth, testing, or bursty AI duties the place demand just isn’t 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 areas. 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 patrons that require real-time determination making, resembling industrial web of issues (IoT), autonomous automobiles, or localized analytics.

Seven causes neoclouds can depend on Cisco for AI infrastructure

Whatever the service mannequin adopted, neocloud suppliers require a sturdy, scalable, and safe basis. Many are discovering that Cisco provides 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 provides 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 heart interconnect options, in addition to safety and observability for AI. Advantages for neoclouds embrace architectural flexibility, streamlined procurement, constant operations and assist, 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 atmosphere 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. Trade-leading AI networking materials: Cisco AI Networking delivers scalable front-end and back-end materials inside information facilities, along with information heart 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 change silicon—all unified underneath 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 numerous accomplice ecosystem: Cisco companions with a broad ecosystem to ship the most effective 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 lots 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 offers a full-stack answer with safety built-in at each layer. With Splunk, Cisco offers Observability for AI for deep visibility into each layer of the atmosphere, together with GPU infrastructure, GenAI, LLM outputs, and AI purposes. Cisco provides 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 heart interconnect, wide-area networks, and edge. It delivers superior congestion management and cargo balancing for AI materials and is programmable to assist rising requirements.

Constructing the way forward for AI cloud providers with Cisco

Cisco is uniquely positioned to assist 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 velocity, reliability, and effectivity.

Because the market continues to evolve, Cisco offers the experience, go-to-market assist, and options to assist neoclouds speed up time to service, maximize the effectivity of GPU clusters, and in the end safe a foundational position 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. (Inner Cisco survey) 

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