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This startup wants to use beams of energy to drill geothermal wells

A beam of energy hit the slab of rock, which quickly began to glow. Pieces cracked off, sparks ricocheted, and dust whirled around under a blast of air.  From inside a modified trailer, I peeked through the window as a millimeter-wave drilling rig attached to an unassuming box truck melted a hole into a piece of basalt in less than two minutes. After the test was over, I stepped out of the trailer into the Houston heat. I could see a ring of black, glassy material stamped into the slab fragments, evidence of where the rock had melted.   This rock-melting drilling technology from the geothermal startup Quaise is certainly unconventional. The company hopes it’s the key to unlocking geothermal energy and making it feasible anywhere. Geothermal power tends to work best in those parts of the world that have the right geology and heat close to the surface. Iceland and the western US, for example, are hot spots for this always-available renewable energy source because they have all the necessary ingredients. But by digging deep enough, companies could theoretically tap into the Earth’s heat from anywhere on the globe. That’s a difficult task, though. In some places, accessing temperatures high enough to efficiently generate electricity would require drilling miles and miles beneath the surface. Often, that would mean going through very hard rock, like granite. Quaise’s proposed solution is a new mode of drilling that eschews the traditional technique of scraping into rock with a hard drill bit. Instead, the company plans to use a gyrotron, a device that emits high-frequency electromagnetic radiation. Today, the fusion power industry uses gyrotrons to heat plasma to 100 million °C, but Quaise plans to use them to blast, melt, and vaporize rock. This could, in theory, make drilling faster and more economical, allowing for geothermal energy to be accessed anywhere.   Since Quaise’s founding in 2018, the company has demonstrated that its systems work in the controlled conditions of the laboratory, and it has started trials in a semi-controlled environment, including the backyard of its Houston headquarters. Now these efforts are leaving the lab, and the team is taking gyrotron drilling technology to a quarry to test it in real-world conditions.  Some experts caution that reinventing drilling won’t be as simple, or as fast, as Quaise’s leadership hopes. The startup is also attempting to raise a large funding round this year, at a time when economic uncertainty is slowing investment and the US climate technology industry is in a difficult spot politically because of policies like tariffs and a slowdown in government support. Quaise’s big idea aims to accelerate an old source of renewable energy. This make-or-break moment might determine how far that idea can go.  Blasting through Rough calculations from the geothermal industry suggest that enough energy is stored inside the Earth to meet our energy demands for tens or even hundreds of thousands of years, says Matthew Houde, cofounder and chief of staff at Quaise. After that, other sources like fusion should be available, “assuming we continue going on that long, so to speak,” he quips.  “We want to be able to scale this style of geothermal beyond the locations where we’re able to readily access those temperatures today with conventional drilling,” Houde says. The key, he adds, is simply going deep enough: “If we can scale those depths to 10 to 20 kilometers, then we can enable super-hot geothermal to be worldwide accessible.” Though that’s technically possible, there are few examples of humans drilling close to this depth. One research project that began in 1970 in the former Soviet Union reached just over 12 kilometers, but it took nearly 20 years and was incredibly expensive.  Quaise hopes to speed up drilling and cut its cost, Houde says. The company’s goal is to drill through rock at a rate of between three and five meters per hour of steady operation. One key factor slowing down many operations that drill through hard rocks like granite is nonproductive time. For example, equipment frequently needs to be brought all the way back up to the surface for repairs or to replace drill bits. Quaise’s key to potentially changing that is its gyrotron. The device emits millimeter waves, beams of energy with wavelengths that fall between microwaves and infrared waves. It’s a bit like a laser, but the beam is not visible to the human eye.  Quaise’s goal is to heat up the target rock, effectively drilling it away. The gyrotron beams waves at a target rock via a waveguide, a hollow metal tube that directs the energy to the right spot. (One of the company’s main technological challenges is to avoid accidentally making plasma, an ionized, superheated state of matter, as it can waste energy and damage key equipment like the waveguide.) Here’s how it works in practice: When Quaise’s rig is drilling a hole, the tip of the waveguide is positioned a foot or so away from the rock it’s targeting. The gyrotron lets out a burst of millimeter waves for about a minute. They travel down the waveguide and hit the target rock, which heats up and then cracks, melts, or even vaporizes. Then the beam stops, and the drill bit at the end of the waveguide is lowered to the surface of the rock, rotating and scraping off broken shards and melted bits of rock as it descends. A steady blast of air carries the debris up to the surface, and the process repeats. The energy in the millimeter waves does the hard work, and the scraping and compressed air help remove the fractured or melted material away. This system is what I saw in action at the company’s Houston headquarters. The drilling rig in the yard is a small setup, something like what a construction company might use to drill micro piles for a foundation or what researchers would use to take geological samples. In total, the gyrotron has a power of 100 kilowatts. A cooling system helps the superconducting magnet in the gyrotron reach the necessary temperature (about -200 °C), and a filtration system catches the debris that sloughs off samples.  CASEY CROWNHART Soon after my visit, this backyard setup was packed up and shipped to central Texas to be used for further field testing in a rock quarry. The company announced in July that it had used that rig to drill a 100-meter-deep hole at that field test site.  Quaise isn’t the first to develop nonmechanical drilling, says Roland Horne, head of the geothermal program at Stanford University. “Burning holes in rocks is impressive. However, that’s not the whole of what’s involved in drilling,” he says. The operation will need to be able to survive the high temperatures and pressures at the bottom of wells as they’re drilled, he says. So far, the company has found success drilling holes into columns of rock inside metal casings, as well as the quarry in its field trials. But there’s a long road between drilling into predictable material in a relatively predictable environment and creating a miles-deep geothermal well.  Rocky roads In April, Quaise fully integrated its second 100-kilowatt gyrotron onto an oil and gas rig owned by the company’s investor and technology partner Nabors. This rig is the sort that would typically be used for training or engineering development, and it’s set up along with a row of other rigs at the Nabors headquarters, just across town from the Quaise lab. At 182 feet high, the top is visible above the office building from the parking lot. When I visited in April, the company was still completing initial tests, using special thermal paper and firing short blasts to test the setup. In May the company tested this integrated rig, drilling a hole four inches in diameter and 30 feet deep. Another test in June reached a depth of 40 feet. These holes were drilled into columns of basalt that had been lowered into the ground as a test material. While the company tests its 100-kilowatt systems at the rig and the quarry, the next step is an even larger system, which features a gyrotron that’s 10 times more powerful. This one-megawatt system will drill larger holes, over eight inches across, and represents the commercial-scale version of the company’s technology. Drilling tests are set to begin with this larger drill in 2026.  The one-megawatt system actually needs a little over three megawatts of power overall, including the energy needed to run support equipment like cooling systems and the compressor that blows air into the hole, carrying the rock dust back up to the surface. That power demand is similar to what an oil and gas rig requires today.  Quaise is in the process of setting up a pilot plant in Oregon, basically on the side of a volcano, says Trenton Cladouhos, the company’s vice president of geothermal resource development. This project will use conventional drilling, and its main purpose is to show that Quaise can build and run a geothermal plant, Cladouhos says.  The company is building an exploration well this year and plans to begin drilling production wells (those that can eventually be used to generate electricity) in 2026. That pilot project will reach about 20 megawatts of power with the first few wells, operating on rock that’s around 350 °C. The company plans to have it operational as early as 2028. Quaise’s strategy with the Oregon project is to show that it can use super-hot rocks to produce geothermal power efficiently, says CEO Carlos Araque. After it fires up the plant and begins producing electricity, the company can go back in and deepen the holes with millimeter-wave drilling in the future, he adds. A drilling test shows Quaise’s millimeter-wave technology drilling into a piece of granite. Araque says the company already has some customers lined up for the energy it’ll produce, though he declined to name them, saying only that one was a big tech company, and there’s a utility involved as well. But the startup will need more capital to finish this project and complete its testing with the larger, one-megawatt gyrotron. And uncertainty is floating around in climate tech, given the Trump administration’s tariffs and rollback of financial support for climate tech (though geothermal has been relatively unscathed).  Quaise still has some technical barriers to overcome before it begins building commercial power plants.  One potential hurdle: drilling in different directions. Right now, millimeter-wave drilling can go in a straight line, straight down. Developing a geothermal plant like the one at the Oregon site will likely require what’s called directional drilling, the ability to drill in directions other than vertical. And the company will likely face challenges as it transitions from lab testing to field trials. One key challenge for geothermal technology companies attempting to operate at this depth will be  keeping wells functional for a long time to keep a power plant operating, says Jefferson Tester, a professor at Cornell University and an expert in geothermal energy. Quaise’s technology is very aspirational, Tester says, and it can be difficult for new ideas in geothermal to compete economically. “It’s eventually all about cost,” he says. And companies with ambitious ideas run the risk that their investors will run out of patience before they can develop their technology enough to make it onto the grid. “There’s a lot more to learn—I mean, we’re reinventing drilling,” says Steve Jeske, a project manager at Quaise. “It seems like it shouldn’t work, but it does.”

A beam of energy hit the slab of rock, which quickly began to glow. Pieces cracked off, sparks ricocheted, and dust whirled around under a blast of air. 

From inside a modified trailer, I peeked through the window as a millimeter-wave drilling rig attached to an unassuming box truck melted a hole into a piece of basalt in less than two minutes. After the test was over, I stepped out of the trailer into the Houston heat. I could see a ring of black, glassy material stamped into the slab fragments, evidence of where the rock had melted.  

This rock-melting drilling technology from the geothermal startup Quaise is certainly unconventional. The company hopes it’s the key to unlocking geothermal energy and making it feasible anywhere.

Geothermal power tends to work best in those parts of the world that have the right geology and heat close to the surface. Iceland and the western US, for example, are hot spots for this always-available renewable energy source because they have all the necessary ingredients. But by digging deep enough, companies could theoretically tap into the Earth’s heat from anywhere on the globe.

That’s a difficult task, though. In some places, accessing temperatures high enough to efficiently generate electricity would require drilling miles and miles beneath the surface. Often, that would mean going through very hard rock, like granite.

Quaise’s proposed solution is a new mode of drilling that eschews the traditional technique of scraping into rock with a hard drill bit. Instead, the company plans to use a gyrotron, a device that emits high-frequency electromagnetic radiation. Today, the fusion power industry uses gyrotrons to heat plasma to 100 million °C, but Quaise plans to use them to blast, melt, and vaporize rock. This could, in theory, make drilling faster and more economical, allowing for geothermal energy to be accessed anywhere.  

Since Quaise’s founding in 2018, the company has demonstrated that its systems work in the controlled conditions of the laboratory, and it has started trials in a semi-controlled environment, including the backyard of its Houston headquarters. Now these efforts are leaving the lab, and the team is taking gyrotron drilling technology to a quarry to test it in real-world conditions. 

Some experts caution that reinventing drilling won’t be as simple, or as fast, as Quaise’s leadership hopes. The startup is also attempting to raise a large funding round this year, at a time when economic uncertainty is slowing investment and the US climate technology industry is in a difficult spot politically because of policies like tariffs and a slowdown in government support. Quaise’s big idea aims to accelerate an old source of renewable energy. This make-or-break moment might determine how far that idea can go. 

Blasting through

Rough calculations from the geothermal industry suggest that enough energy is stored inside the Earth to meet our energy demands for tens or even hundreds of thousands of years, says Matthew Houde, cofounder and chief of staff at Quaise. After that, other sources like fusion should be available, “assuming we continue going on that long, so to speak,” he quips. 

“We want to be able to scale this style of geothermal beyond the locations where we’re able to readily access those temperatures today with conventional drilling,” Houde says. The key, he adds, is simply going deep enough: “If we can scale those depths to 10 to 20 kilometers, then we can enable super-hot geothermal to be worldwide accessible.”

Though that’s technically possible, there are few examples of humans drilling close to this depth. One research project that began in 1970 in the former Soviet Union reached just over 12 kilometers, but it took nearly 20 years and was incredibly expensive. 

Quaise hopes to speed up drilling and cut its cost, Houde says. The company’s goal is to drill through rock at a rate of between three and five meters per hour of steady operation.

One key factor slowing down many operations that drill through hard rocks like granite is nonproductive time. For example, equipment frequently needs to be brought all the way back up to the surface for repairs or to replace drill bits.

Quaise’s key to potentially changing that is its gyrotron. The device emits millimeter waves, beams of energy with wavelengths that fall between microwaves and infrared waves. It’s a bit like a laser, but the beam is not visible to the human eye. 

Quaise’s goal is to heat up the target rock, effectively drilling it away. The gyrotron beams waves at a target rock via a waveguide, a hollow metal tube that directs the energy to the right spot. (One of the company’s main technological challenges is to avoid accidentally making plasma, an ionized, superheated state of matter, as it can waste energy and damage key equipment like the waveguide.)

Here’s how it works in practice: When Quaise’s rig is drilling a hole, the tip of the waveguide is positioned a foot or so away from the rock it’s targeting. The gyrotron lets out a burst of millimeter waves for about a minute. They travel down the waveguide and hit the target rock, which heats up and then cracks, melts, or even vaporizes.

Then the beam stops, and the drill bit at the end of the waveguide is lowered to the surface of the rock, rotating and scraping off broken shards and melted bits of rock as it descends. A steady blast of air carries the debris up to the surface, and the process repeats. The energy in the millimeter waves does the hard work, and the scraping and compressed air help remove the fractured or melted material away.

This system is what I saw in action at the company’s Houston headquarters. The drilling rig in the yard is a small setup, something like what a construction company might use to drill micro piles for a foundation or what researchers would use to take geological samples. In total, the gyrotron has a power of 100 kilowatts. A cooling system helps the superconducting magnet in the gyrotron reach the necessary temperature (about -200 °C), and a filtration system catches the debris that sloughs off samples. 

Quaise truck and mobile drill unit

CASEY CROWNHART

Soon after my visit, this backyard setup was packed up and shipped to central Texas to be used for further field testing in a rock quarry. The company announced in July that it had used that rig to drill a 100-meter-deep hole at that field test site. 

Quaise isn’t the first to develop nonmechanical drilling, says Roland Horne, head of the geothermal program at Stanford University. “Burning holes in rocks is impressive. However, that’s not the whole of what’s involved in drilling,” he says. The operation will need to be able to survive the high temperatures and pressures at the bottom of wells as they’re drilled, he says.

So far, the company has found success drilling holes into columns of rock inside metal casings, as well as the quarry in its field trials. But there’s a long road between drilling into predictable material in a relatively predictable environment and creating a miles-deep geothermal well. 

Rocky roads

In April, Quaise fully integrated its second 100-kilowatt gyrotron onto an oil and gas rig owned by the company’s investor and technology partner Nabors. This rig is the sort that would typically be used for training or engineering development, and it’s set up along with a row of other rigs at the Nabors headquarters, just across town from the Quaise lab. At 182 feet high, the top is visible above the office building from the parking lot.

When I visited in April, the company was still completing initial tests, using special thermal paper and firing short blasts to test the setup. In May the company tested this integrated rig, drilling a hole four inches in diameter and 30 feet deep. Another test in June reached a depth of 40 feet. These holes were drilled into columns of basalt that had been lowered into the ground as a test material.

While the company tests its 100-kilowatt systems at the rig and the quarry, the next step is an even larger system, which features a gyrotron that’s 10 times more powerful. This one-megawatt system will drill larger holes, over eight inches across, and represents the commercial-scale version of the company’s technology. Drilling tests are set to begin with this larger drill in 2026. 

The one-megawatt system actually needs a little over three megawatts of power overall, including the energy needed to run support equipment like cooling systems and the compressor that blows air into the hole, carrying the rock dust back up to the surface. That power demand is similar to what an oil and gas rig requires today. 

Quaise is in the process of setting up a pilot plant in Oregon, basically on the side of a volcano, says Trenton Cladouhos, the company’s vice president of geothermal resource development. This project will use conventional drilling, and its main purpose is to show that Quaise can build and run a geothermal plant, Cladouhos says. 

The company is building an exploration well this year and plans to begin drilling production wells (those that can eventually be used to generate electricity) in 2026. That pilot project will reach about 20 megawatts of power with the first few wells, operating on rock that’s around 350 °C. The company plans to have it operational as early as 2028.

Quaise’s strategy with the Oregon project is to show that it can use super-hot rocks to produce geothermal power efficiently, says CEO Carlos Araque. After it fires up the plant and begins producing electricity, the company can go back in and deepen the holes with millimeter-wave drilling in the future, he adds.

A drilling test shows Quaise’s millimeter-wave technology drilling into a piece of granite.

Araque says the company already has some customers lined up for the energy it’ll produce, though he declined to name them, saying only that one was a big tech company, and there’s a utility involved as well.

But the startup will need more capital to finish this project and complete its testing with the larger, one-megawatt gyrotron. And uncertainty is floating around in climate tech, given the Trump administration’s tariffs and rollback of financial support for climate tech (though geothermal has been relatively unscathed). 

Quaise still has some technical barriers to overcome before it begins building commercial power plants. 

One potential hurdle: drilling in different directions. Right now, millimeter-wave drilling can go in a straight line, straight down. Developing a geothermal plant like the one at the Oregon site will likely require what’s called directional drilling, the ability to drill in directions other than vertical.

And the company will likely face challenges as it transitions from lab testing to field trials. One key challenge for geothermal technology companies attempting to operate at this depth will be  keeping wells functional for a long time to keep a power plant operating, says Jefferson Tester, a professor at Cornell University and an expert in geothermal energy.

Quaise’s technology is very aspirational, Tester says, and it can be difficult for new ideas in geothermal to compete economically. “It’s eventually all about cost,” he says. And companies with ambitious ideas run the risk that their investors will run out of patience before they can develop their technology enough to make it onto the grid.

“There’s a lot more to learn—I mean, we’re reinventing drilling,” says Steve Jeske, a project manager at Quaise. “It seems like it shouldn’t work, but it does.”

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Technology is coming so fast data centers are obsolete by the time they launch

 Tariffs aside, Enderle feels that AI technology and ancillary technology around it like battery backup is still in the early stages of development and there will be significant changes coming in the next few years. GPUs from AMD and Nvidia are the primary processors for AI, and they are derived from video game accelerators. They were never meant for use in AI processing, but they are being fine-tuned for the task.  It’s better to wait to get a more mature product than something that is still in a relatively early state. But Alan Howard, senior analyst for data center infrastructure at Omdia, disagrees and says not to wait. One reason is the rate at which people that are building data centers is all about seizing market opportunity.” You must have a certain amount of capacity to make sure that you can execute on strategies meant to capture more market share.” The same sentiment exists on the colocation side, where there is a considerable shortage of capacity as demand outstrips supply. “To say, well, let’s wait and see if maybe we’ll be able to build a better, more efficient data center by not building anything for a couple of years. That’s just straight up not going to happen,” said Howard. “By waiting, you’re going to miss market opportunities. And these companies are all in it to make money. And so, the almighty dollar rules,” he added. Howard acknowledges that by the time you design and build the data center, it’s obsolete. The question is, does that mean it can’t do anything? “I mean, if you start today on a data center that’s going to be full of [Nvidia] Blackwells, and let’s say you deploy in two years when they’ve already retired Blackwell, and they’re making something completely new. Is that data

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‘Significant’ outage at Alaska Airlines not a security incident, but a hardware breakdown

The airline told Network World that when the critical piece of what it described as “third-party multi-redundant hardware” failed unexpectedly, “it impacted several of our key systems that enable us to run various operations.” The company is currently working with its vendor to replace the faulty equipment at the data center. The airline has cancelled more than 150 flights since Sunday evening, including 64 on Monday. The company said additional flight disruptions are likely as it repositions aircraft and crews throughout its network. Alaska Airlines emphasized that the safety of its flights was never compromised, and that “the IT outage is not related to any other current events, and it’s not connected to the recent cybersecurity incident at Hawaiian Airlines.” The airline did not provide additional information to Network World about the specifics of the outage. “There are many redundant components that can fail,” said Roberts, noting that it could have been something as simple as a RAID array (which combines multiple physical data storage components into one or more logical units). Or, on the network side, it could have been the failure of a pair of load balancers. “It’s interesting that redundancy didn’t save them,” said Roberts. “Perhaps multiple pieces of hardware were impacted by the same issue, like a firmware update. Or, maybe they’re just really unlucky.”

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Cisco upgrades 400G optical receiver to boost AI infrastructure throughput

“In the data center, what’s really changed in the last year or so is that with AI buildouts, there’s much, much more optics that are part of 400G and 800G. It’s not so much using 10G and 25G optics, which we still sell a ton of, for campus applications. But for AI infrastructure, the 400G and 800G optics are really the dominant optics for that application,” Gartner said. Most of the AI infrastructure builds have been for training models, especially in hyperscaler environments, Gartner said. “I expect, towards the tail end of this year, we’ll start to see more enterprises deploying AI infrastructure for inference. And once they do that, because it has an Nvidia GPU attached to it, it’s going to be a 400G or 800G optic.” Core enterprise applications – such as real-time trading, high-frequency transactions, multi-cloud communications, cybersecurity analytics, network forensics, and industrial IoT – can also utilize the higher network throughput, Gartner said. 

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Supermicro bets big on 4-socket X14 servers to regain enterprise trust

In April, Dell announced its PowerEdge R470, R570, R670, and R770 servers with Intel Xeon 6 Processors with P-cores, but with single and double-socket servers. Similarly, Lenovo’s ThinkSystem V4 servers are also based on the Intel Xeon 6 processor but are limited to dual socket configurations. The launch of 4-socket servers by Supermicro reflects a growing enterprise need for localized compute that can support memory-bound AI and reduce the complexity of distributed architectures. “The modern 4-socket servers solve multiple pain points that have intensified with GenAI and memory-intensive analytics. Enterprises are increasingly challenged by latency, interconnect complexity, and power budgets in distributed environments. High-capacity, scale-up servers provide an architecture that is more aligned with low-latency, large-model processing, especially where data residency or compliance constraints limit cloud elasticity,” said Sanchit Vir Gogia, chief analyst and CEO at Greyhound Research. “Launching a 4-socket Xeon 6 platform and packaging it within their modular ‘building block’ strategy shows Supermicro is focusing on staying ahead in enterprise and AI data center compute,” said Devroop Dhar, co-founder and MD at Primus Partner. A critical launch after major setbacks Experts peg this to be Supermicro’s most significant product launch since it became mired in governance and regulatory controversies. In 2024, the company lost Ernst & Young, its second auditor in two years, following allegations by Hindenburg Research involving accounting irregularities and the alleged export of sensitive chips to sanctioned entities. Compounding its troubles, Elon Musk’s AI startup xAI redirected its AI server orders to Dell, a move that reportedly cost Supermicro billions in potential revenue and damaged its standing in the hyperscaler ecosystem. Earlier this year, HPE signed a $1 billion contract to provide AI servers for X, a deal Supermicro was also bidding for. “The X14 launch marks a strategic reinforcement for Supermicro, showcasing its commitment

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Moving AI workloads off the cloud? A hefty data center retrofit awaits

“If you have a very specific use case, and you want to fold AI into some of your processes, and you need a GPU or two and a server to do that, then, that’s perfectly acceptable,” he says. “What we’re seeing, kind of universally, is that most of the enterprises want to migrate to these autonomous agents and agentic AI, where you do need a lot of compute capacity.” Racks of brand-new GPUs, even without new power and cooling infrastructure, can be costly, and Schneider Electric often advises cost-conscious clients to look at previous-generation GPUs to save money. GPU and other AI-related technology is advancing so rapidly, however, that it’s hard to know when to put down stakes. “We’re kind of in a situation where five years ago, we were talking about a data center lasting 30 years and going through three refreshes, maybe four,” Carlini says. “Now, because it is changing so much and requiring more and more power and cooling you can’t overbuild and then grow into it like you used to.”

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My take on the Gartner Magic Quadrant for LAN infrastructure? Highly inaccurate

Fortinet being in the leader quadrant may surprise some given they are best known as a security vendor, but the company has quietly built a broad and deep networking portfolio. I have no issue with them being considered a leader and believe for security conscious companies, Fortinet is a great option. Challenger Cisco is the only company listed as a challenger, and its movement out of the leader quadrant highlights just how inaccurate this document is. There is no vendor that sells more networking equipment in more places than Cisco, and it has led enterprise networking for decades. Several years ago, when it was a leader, I could argue the division of engineering between Meraki and Catalyst could have pushed them out, but it didn’t. So why now? At its June Cisco Live event, the company launched a salvo of innovation including AI Canvas, Cisco AI Assistant, and much more. It’s also continually improved the interoperability between Meraki and Catalyst and announced several new products. AI Canvas is a completely new take, was well received by customers at Cisco Live, and reinvents the concept of AIOps. As I stated above, because of the December cutoff time for information gathering, none of this was included, but that makes Cisco’s representation false. Also, I find this MQ very vague in its “Cautions” segment. As an example, it states: “Cisco’s product strategy isn’t well-aligned with key enterprise needs.” Some details here would be helpful. In my conversations with Cisco, which includes with Chief Product Officer and President Jeetu Patel, the company has reiterated that its strategy is to help customers be AI-ready with products that are easier to deploy and manage, more automated, and with a lower cost to run. That seems well-aligned with customer needs. If Gartner is hearing customers want networks

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Microsoft will invest $80B in AI data centers in fiscal 2025

And Microsoft isn’t the only one that is ramping up its investments into AI-enabled data centers. Rival cloud service providers are all investing in either upgrading or opening new data centers to capture a larger chunk of business from developers and users of large language models (LLMs).  In a report published in October 2024, Bloomberg Intelligence estimated that demand for generative AI would push Microsoft, AWS, Google, Oracle, Meta, and Apple would between them devote $200 billion to capex in 2025, up from $110 billion in 2023. Microsoft is one of the biggest spenders, followed closely by Google and AWS, Bloomberg Intelligence said. Its estimate of Microsoft’s capital spending on AI, at $62.4 billion for calendar 2025, is lower than Smith’s claim that the company will invest $80 billion in the fiscal year to June 30, 2025. Both figures, though, are way higher than Microsoft’s 2020 capital expenditure of “just” $17.6 billion. The majority of the increased spending is tied to cloud services and the expansion of AI infrastructure needed to provide compute capacity for OpenAI workloads. Separately, last October Amazon CEO Andy Jassy said his company planned total capex spend of $75 billion in 2024 and even more in 2025, with much of it going to AWS, its cloud computing division.

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John Deere unveils more autonomous farm machines to address skill labor shortage

Join our daily and weekly newsletters for the latest updates and exclusive content on industry-leading AI coverage. Learn More Self-driving tractors might be the path to self-driving cars. John Deere has revealed a new line of autonomous machines and tech across agriculture, construction and commercial landscaping. The Moline, Illinois-based John Deere has been in business for 187 years, yet it’s been a regular as a non-tech company showing off technology at the big tech trade show in Las Vegas and is back at CES 2025 with more autonomous tractors and other vehicles. This is not something we usually cover, but John Deere has a lot of data that is interesting in the big picture of tech. The message from the company is that there aren’t enough skilled farm laborers to do the work that its customers need. It’s been a challenge for most of the last two decades, said Jahmy Hindman, CTO at John Deere, in a briefing. Much of the tech will come this fall and after that. He noted that the average farmer in the U.S. is over 58 and works 12 to 18 hours a day to grow food for us. And he said the American Farm Bureau Federation estimates there are roughly 2.4 million farm jobs that need to be filled annually; and the agricultural work force continues to shrink. (This is my hint to the anti-immigration crowd). John Deere’s autonomous 9RX Tractor. Farmers can oversee it using an app. While each of these industries experiences their own set of challenges, a commonality across all is skilled labor availability. In construction, about 80% percent of contractors struggle to find skilled labor. And in commercial landscaping, 86% of landscaping business owners can’t find labor to fill open positions, he said. “They have to figure out how to do

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2025 playbook for enterprise AI success, from agents to evals

Join our daily and weekly newsletters for the latest updates and exclusive content on industry-leading AI coverage. Learn More 2025 is poised to be a pivotal year for enterprise AI. The past year has seen rapid innovation, and this year will see the same. This has made it more critical than ever to revisit your AI strategy to stay competitive and create value for your customers. From scaling AI agents to optimizing costs, here are the five critical areas enterprises should prioritize for their AI strategy this year. 1. Agents: the next generation of automation AI agents are no longer theoretical. In 2025, they’re indispensable tools for enterprises looking to streamline operations and enhance customer interactions. Unlike traditional software, agents powered by large language models (LLMs) can make nuanced decisions, navigate complex multi-step tasks, and integrate seamlessly with tools and APIs. At the start of 2024, agents were not ready for prime time, making frustrating mistakes like hallucinating URLs. They started getting better as frontier large language models themselves improved. “Let me put it this way,” said Sam Witteveen, cofounder of Red Dragon, a company that develops agents for companies, and that recently reviewed the 48 agents it built last year. “Interestingly, the ones that we built at the start of the year, a lot of those worked way better at the end of the year just because the models got better.” Witteveen shared this in the video podcast we filmed to discuss these five big trends in detail. Models are getting better and hallucinating less, and they’re also being trained to do agentic tasks. Another feature that the model providers are researching is a way to use the LLM as a judge, and as models get cheaper (something we’ll cover below), companies can use three or more models to

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OpenAI’s red teaming innovations define new essentials for security leaders in the AI era

Join our daily and weekly newsletters for the latest updates and exclusive content on industry-leading AI coverage. Learn More OpenAI has taken a more aggressive approach to red teaming than its AI competitors, demonstrating its security teams’ advanced capabilities in two areas: multi-step reinforcement and external red teaming. OpenAI recently released two papers that set a new competitive standard for improving the quality, reliability and safety of AI models in these two techniques and more. The first paper, “OpenAI’s Approach to External Red Teaming for AI Models and Systems,” reports that specialized teams outside the company have proven effective in uncovering vulnerabilities that might otherwise have made it into a released model because in-house testing techniques may have missed them. In the second paper, “Diverse and Effective Red Teaming with Auto-Generated Rewards and Multi-Step Reinforcement Learning,” OpenAI introduces an automated framework that relies on iterative reinforcement learning to generate a broad spectrum of novel, wide-ranging attacks. Going all-in on red teaming pays practical, competitive dividends It’s encouraging to see competitive intensity in red teaming growing among AI companies. When Anthropic released its AI red team guidelines in June of last year, it joined AI providers including Google, Microsoft, Nvidia, OpenAI, and even the U.S.’s National Institute of Standards and Technology (NIST), which all had released red teaming frameworks. Investing heavily in red teaming yields tangible benefits for security leaders in any organization. OpenAI’s paper on external red teaming provides a detailed analysis of how the company strives to create specialized external teams that include cybersecurity and subject matter experts. The goal is to see if knowledgeable external teams can defeat models’ security perimeters and find gaps in their security, biases and controls that prompt-based testing couldn’t find. What makes OpenAI’s recent papers noteworthy is how well they define using human-in-the-middle

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