Cisco Sees 85% Surge in AI Switch Orders Amid Shift to Sovereign Cloud

Cisco Systems has reported a significant surge in orders for its Enterprise Nexus switches geared towards AI deployments, with an astonishing growth of over 85% quarter-on-quarter.

This trend reflects a broader shift in enterprise infrastructure expenditure as organizations reassess the economics of token consumption and consider the implications of open-weight models, data security, sovereignty, and agentic AI on their operations.

Cisco's CEO, Chuck Robbins, noted that discussions around token consumption have evolved into more complex concerns about these factors, indicating a paradigm shift in enterprise AI expenditure towards discerning which workloads are best suited for public cloud, sovereign cloud, private data centers, or edge computing.

The company anticipates that hyperscaler AI infrastructure revenue will reach $7.5 billion by fiscal 2027, with orders reaching $4 billion in the fourth quarter and a total of $9.3 billion recorded for fiscal 2026.