Cisco Acquires AI Startup NeuralFabric to Strengthen Enterprise Generative AI Capabilities

Cisco to acquire Seattle-area AI startup NeuralFabric, expanding push into enterprise generative AI

Cisco plans to acquire NeuralFabric, a Seattle-area startup founded by a group of Microsoft veterans that makes back-end software for companies to build and run their own generative AI models. Financial terms were not disclosed. The Silicon Valley enterprise tech mainstay said the deal will bolster its AI Canvas initiative, a generative UI and collaboration environment announced earlier this year. In its announcement Thursday morning, Cisco highlighted NeuralFabric's expertise in distributed systems, model training, and flexible deployment as a complement to its existing AI assistant, cybersecurity models, and data fabric strategy. DJ Sampath, senior vice president for AI software and platforms, said in the announcement that the startup has "cracked a crucial part of this puzzle" by building technology that lets companies develop their own domain-specific small language models using proprietary data across cloud or on-premises environments. NeuralFabric, based in Redmond, was founded in 2023 by former Microsoft Azure engineering veteran Weijie Lin (CEO), longtime Microsoft executive John deVadoss, AI entrepreneur Jesus Rodriguez (president), and cloud and security veteran Mark Baciak (CTO), with former Microsoft director Drew Gude (chief revenue officer) also listed as an early exec. The startup employs about nine people, according to LinkedIn. Cisco said the acquisition is expected to close in the second quarter of its 2026 fiscal year (by the end of January), after which NeuralFabric's team will join the company's AI Software and Platform organization. NeuralFabric had raised at least $5 million in funding as of February 2024 announcement. PitchBook lists investors including Collab+Currency, CMT Digital, and New Form Capital.

Building the Future of Enterprise AI: Cisco's Intent to Acquire NeuralFabric

We're living through a remarkable paradox. AI has never been more capable -- or more complicated. Every enterprise wants to harness its power, yet most are wrestling with a fundamental tension: how do you deploy cutting-edge AI while maintaining sovereignty over your data, complying with increasingly stringent regulations, and operating within the current economic realities of scarce GPU resources? According to the 2025 Cisco AI Readiness Index, only 13% of organizations are fully prepared to capture AI's transformative value, highlighting this significant gap between ambition and operational reality. For enterprises to accelerate adoption of AI, we need to fundamentally rethink how we architect AI for the enterprise. That's why I'm excited to announce Cisco's intent to acquire NeuralFabric Corp., a Seattle-based enterprise AI platform company that's cracked a crucial part of this puzzle. NeuralFabric has built an end-to-end generative AI platform that enables organizations to develop domain-specific Small Language Models (SLMs) using their own proprietary data -- deployable across SaaS and on-premise environments with the flexibility and control that today's enterprises demand. We are quickly moving away from the era of one-size-fits-all AI in favor of purpose-built models. Enterprises don't need another generic chatbot trained on the entire internet. They need specialized intelligence built on their data, addressing their specific use cases, operating within their compliance frameworks. This is exactly where Cisco AI Canvas comes in -- our industry-first generative UI collaborative workspace that we announced this past June to redefine how teams and agents work together across data domains and teams. AI Canvas leverages SLMs alongside generative UI capabilities to power intelligent experiences with Cisco AI Assistant and our domain-specific Deep Network Model, enabling context-aware collaboration that understands your network like never before. The development of SLMs and domain-specific AI models like the Deep Network Model are just the beginning of Cisco's commitment to our customers in the AI era. We launched the world's first Security Reasoning Model as part of our commitment to AI-powered cybersecurity. We're advancing Cisco Data Fabric to break down data silos and enable smarter decision-making. As my colleague Kamal outlined in his recent post on machine data, we're creating AI that doesn't just understand generic problems -- it understands your problems, in your environment, with your compliance requirements. Here's what excites me about this acquisition: NeuralFabric brings extraordinary engineering talent with deep expertise in distributed systems, large-scale data platforms, and bespoke SLM development. NeuralFabric's modular approach to AI doesn't just solve today's problems -- it anticipates tomorrow's requirements through continuous learning from real-world data patterns, predictive use case modeling that adapts to your industry's evolution, and proactive compliance monitoring that keeps you ahead of regulatory changes before they impact your operations. For our customers, this means faster paths to building, training, and deploying domain-specific models with enhanced data privacy and unprecedented flexibility. For our engineers, it means further expanding our already dynamic AI capabilities with a team that shares our commitment to enterprise-grade security and responsible AI practices. The AI landscape is evolving too rapidly for half-measures or incremental thinking. Cisco is committed to delivering differentiated solutions that address real-world enterprise challenges -- not with promises, but with platforms that work where and how our customers need them most. NeuralFabric's team will join us in Cisco's AI Software and Platform organization, and together, we'll continue building the infrastructure that enterprises need to operationalize AI with confidence and control. The transaction is expected to close in Q2 of our fiscal year 2026. Between now and then, both companies will continue operating independently, but our shared vision is already clear: making enterprise AI not just possible, but practical, secure, and purpose-built for the complexity of modern business. The future of AI isn't just intelligent -- it's intentional. Cisco and NeuralFabric will continue building our next frontier, together.

Cisco To Acquire AI Startup NeuralFabric For GenAI Push

The tech giant says that NeuralFabric's technology will work within Cisco's AI Canvas, a generative AI user interface introduced earlier this year. Cisco Systems intends to buy enterprise AI platform company NeuralFabric Corp. as the tech giant grows its generative AI prowess, the companies revealed Thursday. Seattle-based NeuralFabric was founded in 2023 by former Microsoft engineers. The startup has "cracked" the code on data sovereignty as a challenge to AI adoption, said DJ Sampath, vice president of product, AI software and platform for Cisco, in a blog post about the acquisition. Financial terms of the deal were not disclosed. NeuralFabric's generative AI platform lets organizations develop domain-specific small language models (SLMs) using their own proprietary data that's deployable across SaaS and on-premise environments, Sampath said. "The development of SLMs and domain-specific AI models like the Deep Network Model are just the beginning of Cisco's commitment to our customers in the AI era," he said. [Related: Highly Anticipated Cisco 360 Program Includes New Incentives, Bonuses, And Specializations for Partners: Execs] NeuralFabric's technology will work with Cisco's AI Canvas, a tool with agentic AI capabilities for customers and partners that was introduced at Cisco Live in June. "NeuralFabric's capabilities will help develop and strengthen the foundation of AI Canvas by introducing advanced tools for modular SLM development, streamlined model training, and flexible deployment options," Sampath explained. The upstart's approach to AI anticipates tomorrow's requirements through continuous learning from real-world data patterns, predictive use case modeling and proactive compliance monitoring, he said. Cisco has been making good on its 2024 promise to place its bets on AI to the tune of $1 billion. One way the tech giant has been doing that is by investing heavily in AI startups that are new on the scene, in addition to buying AI companies. Cisco in April revealed an investment into one-year old startup Gruve.ai, a Redwood City, Calif.-based startup that the tech giant called an emerging "visionary" in helping enterprises harness outcome-based AI solutions. In February, Cisco revealed it had teamed with one of its investment companies, two-year old French AI startup Mistral AI, for the creation of an AI agent that the two companies said will cut down on product renewal times for Cisco's own renewal team. Cisco also invested in upstarts Cohere and Scale AI last year as part of its AI investment fund launch in June 2024. Last year, Cisco also bought two AI companies: Deeper Insights AI Ltd. and Robust Intelligence.