Good morning. Stoked to share that the self-replicating pop star known as Grimes will join us at the fast-approaching Fortune Brainstorm Tech, June 8 to 10, on the campus of the Aspen Institute.
I’ll be interviewing her alongside Warner Music Group CEO Robert Kyncl, whom longtime tech folk will remember from his stints at YouTube and Netflix.
I’ll be frank: This year’s agenda is simply amazing. Register to join us before it’s too late. —Andrew Nusca
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Cisco shares soar almost 20% as AI infrastructure orders jump
Big Tech stocks aren’t known for their big swings. (It kinda comes with the “big” territory.)
But Cisco—Cisco!—just recorded one for the ages. Its shares jumped upwards of 19% to $122 in after-hours trading Wednesday after the San Jose networking icon posted its third-quarter earnings report.
Why the bump? First: Cisco reported better-than-expected earnings and revenue. Q3 revenue increased 12% to $15.84 billion, versus $15.56 billion expected. Q3 earnings per share were $1.06 adjusted versus $1.04 expected.
Second: Cisco better-than-expected guidance for the fourth quarter. Cisco called for $1.17 in adjusted earnings per share on $16.8 billion in revenue; Wall Street was looking for earnings of $1.07 on $15.82 billion in revenue
Plus: CEO Chuck Robbins said he would cut nearly 4,000 jobs, or just under 5% of the company’s employee total, as the company reorganizes around new priorities. (Among them: silicon, optics, security, and “employees’ use of AI across the company,” Robbins writes.)
Finally: Cisco said it received $5.3 billion in hyperscaler and AI infrastructure orders so far this year and raised its forecast for fiscal 2026 to $9 billion, up from $5 billion.
Add it all up and investors swooned. It’s quite the reversal for Cisco, which has not kept pace with its peers in the markets as the AI arms race pushes tech to new highs. If the stock gains stick, they’ll represent Cisco’s best rally since 2002. —AN
SoftBank-owned Arm reportedly wanted to acquire Cerebras
The game of AI musical chairs continues as larger companies sweep up promising startups before their competitors do.
The latest target? Cerebras. The Silicon Valley AI chipmaker on Wednesday priced its IPO at $185 per share, above its expected range of $150 to $160. That values the Andrew Feldman-led company at more than $56 billion—nearly as much as BMW.
But it almost didn’t happen, according to a new report. SoftBank-controlled Arm, led by Rene Haas, tried to buy Cerebras mere weeks ago—only to be rejected, according to Bloomberg. (The offer was preliminary; the price, still unknown.)
Cerebras goes public today; we’ll soon see if it made the right call.
In the meantime, don’t expect SoftBank to go away quietly. Masayoshi Son’s conglomerate is very much still in the market for chipmakers, having added Ampere and Graphcore to its portfolio as it builds out an AI infrastructure supply chain to capitalize on enterprise demand.
“It may sound strange,” Son told investors in 2024, “but I think I was born to realize [artificial superintelligence]. I am super serious about it.” —AN
Sam Altman holds billion-dollar stakes in companies that have done business with OpenAI
OpenAI CEO Sam Altman, despite his lack of an equity stake in the highly valued AI company and his $76,001 salary, isn’t just doing it for the good of humanity—at least according to a new filing related to the ongoing Musk v. Altman case.
According to the court document, Altman holds more than $2 billion worth of investments in companies directly doing business with OpenAI.
Among them: The fusion power company Helion Energy (a $1.7 billion stake), the financial software company Stripe ($633 million), and the “reverse aging” pharma firm Retro Bioscience ($258 million).
Altman also has equity in Cerebras, Lattice, Humane, and Formation Bio, all of which benefit from broad investment in AI.
The revelation is important for two reasons. First: Several state attorneys general—plus foe Elon Musk—have accused Altman of self-dealing ahead of OpenAI’s expected and hotly anticipated IPO. Second: Musk’s lead attorney in the case used the document to help support Musk’s claim that Altman was unjustly enriched when he allegedly steered OpenAI away from its charitable founding mission.
For his part, Altman maintains that he acted appropriately in the dealings between his employer and the companies in which he invests. For example, Altman was “recused” on “both sides” during a 2024 deal between OpenAI and Helion, and stepped down from the latter’s board earlier this year as the companies explored a larger deal. —AN
More tech
—LinkedIn may cut 5% of its 17,500 full-time workforce.
—TikTok launches “Go” feature for U.S. users to book attractions, experiences, and hotels within the app.
—Microsoft might acquire AI developer Inception. SpaceX was also reportedly in the mix for the Silicon Valley LLM specialist.
—Instagram debuts Instants, an ephemeral photo feature available in-app and as a standalone app.
—xAI chases finance firms for Grok business. Apollo Global and Morgan Stanley are reportedly testing it.
—LY and Bain Capital partner in $4 billion bid for Japan’s Kakaku, which owns the restaurant review and booking site Tabelog. (Sweden’s EQT previously bid $3.75 billion.)
—Tired: Amazon’s Rufus AI shopping assistant. Wired: Alexa for Shopping.
