The shares of U.S. semiconductor supplier Broadcom (AVGO) stood within the green zone on Wednesday afternoon as AI networking competitor Cisco (CSCO) launched a new chip and router system to connect AI data centers scattered across vast distances. The new chip will compete with Broadcom’s product offerings, such as the Jericho3-AI networking chip released in April 2023.
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Both companies’ shares changed hands approximately 2% higher as of 2:12 p.m. on Wednesday.
Cisco’s New Chip Targets Data Center Bottlenecks
Cisco’s new AI chip, called the Silicon One P200 chip, is designed to run a new router system that was also launched on Wednesday. The new router is called the Cisco 8223, which Cisco said is “built for the intense traffic of AI workloads between data centers.”
The networking hardware and software manufacturer noted that both technologies were designed to “shatter bottlenecks” confronting AI companies while trying to synchronize separated data centers to enhance their AI workloads. The company described the 8223 as power-efficient and scalable, with the built-in ability to support new network protocols and standards without costly hardware upgrades.
“AI compute is outgrowing the capacity of even the largest data center, driving the need for reliable, secure connection of data centers hundreds of miles apart,” said Martin Lund, an executive vice president at Cisco.
Broadcom Begins Shipping New Switching Chips
Cisco’s new offerings come with a deep buffering technology, which is a feature that absorbs unpredictable bursts of data between AI data centers to prevent packet losses and maintain continued data flow despite the difference in physical location.
The company said it has started to ship the new products to its first set of hyperscalers–companies that engage in high-level AI workloads–with ongoing patronage from the cloud computing units of Microsoft (MSFT), Alibaba (BABA), and Lumen (LUMN), among others.
Meanwhile, Broadcom on Wednesday also commenced the shipping of Tomahawk 6-Davisson, the third-generation of its switching chip designed to enhance AI networking. The chip supports networking among scattered data centers by facilitating quick movement of vast amounts of data between them.
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