Cisco Launches New Networking Chip To Connect Multiple Data Centers Over Long Distances

Cisco Systems Inc. (CSCO) on Wednesday launched a new networking chip that will help its customers connect multiple data centers over long distances.

The company launched the Cisco 8223 router powered by the Cisco Silicon One P200 chip, which the communications giant said is the industry’s first 51.2-terabit fixed Ethernet router. “With the Cisco 8223, powered by the new Cisco Silicon One P200, we’re delivering the massive bandwidth, scale and security needed for distributed data center architectures,” Cisco said.

Cisco’s shares were up nearly 1% in Wednesday’s opening trade. Retail sentiment on Stocktwits around the company trended in the ‘bullish’ territory.

The ability to connect multiple data centers will help companies in an industry that is increasingly hungry for AI infrastructure. This will allow companies to pool resources in data centers that are a thousand miles apart, according to a Reuters interview given by Martin Lund, executive vice president of Cisco's common hardware group.

“Now we're saying, ‘the training job is so large, I need multiple data centers to connect together.’ And they can be 1,000 miles apart,” Lund said in the interview. One of the reasons for data centers being spread out is their huge power demands – for instance, Oracle Corp. (ORCL) and OpenAI have data centers in Texas, while Meta Platforms Inc. (META) is headed to Louisiana for capacity.

Cisco said Microsoft Corp. (MSFT) and Alibaba Group Holding’s (BABA) cloud computing units have signed up to buy the new chip.

“The increasing scale of the cloud and AI requires faster networks with more buffering to absorb bursts (of data). We’re pleased to see the P200 providing innovation and more options in this space,” said Dave Maltz, corporate vice president of Azure Networking at Microsoft, according to the report.

CSCO stock is up 18% year-to-date and 33% over the past 12 months.

Also See: Jensen Huang Reportedly Downplays AI Bubble Concerns: 'What's Going On In The World Versus What Happened In 2000 Is Just Dramatically Different'

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