We are on the verge of entering into what we call a networking supercycle,

and you can see it in our results over the course of the past

few years as well, there's been a tremendous amount of momentum.

And the reason for that is, you know, there's if you take a step back and say

what's happening in the market right now, there's two major phenomenons that

are occurring that are very, very poignant to what we're talking about.

The first one is that these we're moving from chat bots to agents for these

agents can conduct tasks and jobs for us almost fully autonomously.

And these agents tend to be far more consumptive in their patterns of usage

on network bandwidth compared to humans. And so while a human might use X amount

of network bandwidth to conduct a task, an agent does 450% more to conduct the

same tasks. Um, and so you just need more network

bandwidth than what you would have otherwise.

And there's going to be trillions of agents around the world.

So that's the first major kind of shift that's happening.

The second one is we're living in a world that's post mythos, um, which is

the model that anthropic had built that actually can really help with

identifying vulnerabilities at a much faster pace with an infrastructure.

And in that world, what you're going to start to see is, you know, protecting

infrastructure and having security and safety be something that's actually

organized with that machine scale is a very important thing.

So these two dynamics and then the third one being physically, which is around

the corner, make networking at the center of it all.

So you'll see that inferencing is much more or just as much network and memory

constrained as as it is compute constrained.

Now we want to ask you about methods. But before we get there, let me just ask

you how Cisco is kind of transforming its business to deal with the kind of

demand the supercycle that you're talking about.

I imagine that's manifest in all of the data center demand that we're seeing

across this country and around the world.

What are you doing differently? How are you meeting that demand as a

company? Yeah, we've you know, one of the things

that we've been very, very focused on is making sure that as the demand explodes,

that we've actually got in our supply chain in order as well.

The good news about Cisco is we are one of the few companies in the world that

are fully vertically integrated platforms.

So we make our own silicon, we make our own optics, which is what communicates

the data between them, between ships, within a data center, or even across

data centers that might be hundreds of kilometers apart.

And then we make our own hardware and systems, and then our own operating

system and software and platforms around security and observability.

So you've got a full stack. And one of the things that we have to do

is get ahead and make sure that we can start forecasting, because if you just

look at last quarter, our product orders on a basis of like, you know, 63 billion

grew 35%. So, um, there's a tremendous amount of

kind of momentum in the business. We've seen that reflected in our stock

price, of course, which I don't check every day.

But like it's it's it's important to know that, that when there's not much

demand signal that you have to make sure that it becomes a supply constrained

world and you have to keep the supply going, which is where we are focused

quite a bit on, in addition to the technology innovation that we continue

to keep moving faster than I have ever seen a company the size moved before and

due to I have to go back to meet those. And I'm glad you said it because it's

been this mythos. Mythos.

Yes, we will follow your lead,

but for whatever reason,

you are one of the few companies who has gotten their hands on this.

So what have you learned? Are you more worried?

Less concerned? Like what are your thoughts on it at

this point? Well, one of the things that is

important is the, uh, as I becomes more and more prominent, you know, mythos

happens to be a catalytic event. But if you just look, in general, what

we've had over the past 30 years is this notion where the adversary, the bad

folks of always have an advantage over the defenders or the good folks.

Um, and, uh, the reason for that is because the adversary has to be right.

Once the defender has to be right every single time.

This is the first time that you might actually see that if we can coordinate

ourselves and companies can coordinate themselves to say, I'm going to make

sure that my defenses are machine scale rather than human scale, and we can

actually have a time advantage because, uh, mythos was made available to

companies like us before and got made available to the world at large, which

is when the bad folks got to get a handle on it.

Uh, you could start to see an asymmetric move where the defenders might have an

asymmetric advantage over the adversaries over time.

A big question, I think that's front of mine for everybody is what AI is going

to do to the labor force. And I saw that Cisco announced plans to

have some layoffs soon. And I'm curious, is that tied into the

AI story? How do you think about the way that I

is, is dislocating the workforce and how it might going forward?

Yeah. So the the restructuring that we

announced actually had nothing to do with, uh, cost efficiency.

It was more on reallocation of dollars. We wanted to make sure that we put the

dollars in higher growth areas. So we will actually see an increase in

all banks, not a decrease year over year as we move forward.

So we're investing in the business rather than taking away from it.

Just to be very clear, um, as you start to think about the, um, the job

situation and what people have talked about.

The common concerns have been, well, I was going to take all jobs.

We're going to be sitting on a beach staring at the ocean.

I was going to do everything for us. What we found is actually exactly the

opposite. As you know, we are one of the largest

users. From a coding perspective.

We have 30,000 engineers or over 30,000 engineers, and they all use, um, uh, you

know, codecs from OpenAI as well as cloud code to go out and write code.

We, in fact, have our first product that's now written 100% with AI, and

we're going to have about half a dozen products by the end of the year.

That would be 100% written where they are.

By the end of next year, 70% of all of our code will be written with AI.

And the things that we're finding that are surprising and counterintuitive is

with all this code written with AI, we are seeing many, many more human

bottlenecks than not. And so I actually think maybe this is

contrarian in the thinking. I think you will see an increase in jobs

rather than a decrease in jobs because of AI.

Um, and um, but what you will see is a lot of reconfiguration of how jobs are

actually being done. And that's something that the delta

between someone who is eye fluent and someone who's not a fluent is not going

to be a 20% gap of productivity. It's going to be like 50 as well.

And so the people that know I role will be in exceptionally high demand.

And that's actually going to continue to persist.

I don't think that changes in and stays. Uh, I have to ask you, Cisco used to get

painted with the same brush as memory, kind of cyclical, low, low and cyclical,

slow and low. Um, what would you say now?

Because it seems like it's not the case. I mean, is this a new era for Cisco?

You know, I when I took over the job of running oil products, um, uh, two years

ago, I had said in a year you will see Cisco look very different.

In two years will be unrecognizable. It does help to have 270 billion add it

to the market cap. But I won't say this, that, um,

fundamentally, the way in which we are operating and the way in which we are

innovating is that, you know, we like to think of ourselves as one of the world's

largest startups. And it is truly the case.

And what you're seeing right now is not just, uh, cyclicality.

It is a secular shift. And when that kind of secular shift

happens, or you have a platform shift of AI being something which is not just a

technology that's out of these are digital coworkers that become additional

teammates on our teams, which increase capacity or, um, for the corpus of

humanity by, by a thousand acts. It becomes a very, very different kind

of, um, you know, dynamic, because all the assumptions you have around the

infrastructure are temporarily changed to permanently changed.

Um, what's the level of throughput you're going to need?

And that actually is going to create a in a network kind of supercycle in our

mind. And uh, it's already created an

infrastructure supercycle. Before we let you go, we're talking to

you on the eve of Cisco Live in Las Vegas.

Big event for for you in the company. Can you give us any sneak peek of what

you plan to to debut there and what you think the focus of that conference is

going to be this year? Give it give us a come on.

Uh, I was told that I need to give you folks some kind of if I can do that.

But, um, you know, we, uh, we have 25,000 of our closest customers that

that tend to come and, uh, assemble in Vegas, and we try to do once a year of

the entire kind of what are the new innovations that we're coming out with?

Um, and, uh, it's it's for our most loyal customers and the ones who are,

um, um, you know, really, really focused on running their businesses on us.

What we've found is, as you've seen, this kind of supercycle for

infrastructure, the way in which organizations manage infrastructure has

actually not kept off. And so it's very complex to manage

infrastructure. So I think you will see you should

expect to see a fundamentally different way with AI and agents than

infrastructure gets managed for organizations and dramatically

simplifies that. The exclusive I'll give you, though, is

we're going to have, um, a whole new era of switches and routers and firewalls

and Wi-Fi access points For updating the infrastructure because up until now,

what was happening was the constraints were largely in, um, uh, in the data

center, but where you needed to do things.

But now what's happening with inferencing is it's no longer just

constrained to the data center. Data centers and hyperscalers are moving

at a really fast pace. We're growing triple digits in that side

of the house, uh, for AI workloads. But when you come to even people sitting

at the desks, uh, that have a laptop will have a mac mini by themselves, and

they'll have 100 agents starting to do work.

Now imagine that gets to be the common way that everyone does work.

You're going to have trillions of agents, and these agents are going to

create so much more traffic, and it's going to require so much more security

and inspection that we feel like the, uh, the, uh, the, the entire networking

apparatus has to get upgraded. And that's what we're actually

announcing. So, uh, don't tell me that I didn't give

you the exclusive, but, um, um, that was, uh, uh, that's something that's

only from Bloomberg. We will take it to, to thank you very

much. Appreciate it.