Cisco announced its intention to acquire NeuralFabric, a Seattle-based provider of enterprise AI platforms, in a move designed to accelerate the company’s strategy for delivering domain-specific AI models and reinforce its position in the rapidly evolving enterprise AI market. The acquisition is expected to close in the second quarter of Cisco’s fiscal year 2026.
The deal reflects growing demand for specialized AI systems as enterprises move away from general-purpose models toward tailored Small Language Models that operate securely within an organization’s unique data environment. NeuralFabric has developed an end-to-end generative AI platform enabling companies to build their own SLMs using proprietary datasets and deploy them flexibly across cloud-based and on-premise systems.
Cisco highlighted that only a small fraction of enterprises are currently prepared to leverage AI’s potential fully, citing findings from the 2025 Cisco AI Readiness Index. The acquisition aims to close this capability gap by pairing NeuralFabric’s modular model-development tools with Cisco’s broader efforts to reshape enterprise AI infrastructure through initiatives such as Cisco AI Canvas, the company’s generative UI collaborative workspace announced in June.
AI Canvas is designed to help organizations harness domain-specific intelligence by integrating SLMs, Cisco AI Assistant, and the company’s Deep Network Model, enabling context-aware collaboration. Cisco noted that the addition of NeuralFabric’s technology will strengthen the foundation of AI Canvas by enhancing model training speed, improving deployment flexibility, and enabling the development of tailored AI systems that adhere to enterprise compliance requirements.
The acquisition also aligns with Cisco’s expanding AI portfolio, which includes its Security Reasoning Model for cybersecurity and continued advancements in Cisco Data Fabric to unify fragmented data environments. By integrating NeuralFabric’s engineering talent—specialists in distributed systems, large-scale data platforms, and SLM development—Cisco expects to deliver faster paths for customers to build and operationalize domain-specific AI while preserving data sovereignty and meeting regulatory standards.
Following the close of the transaction, NeuralFabric’s team will join Cisco’s AI Software and Platform organization. Both companies will operate independently until the deal is finalized. Still, Cisco said the combined vision is already aligned around building secure, adaptable, and purpose-built AI solutions for enterprise environments.
KEY QUOTES:
“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.”
DJ Sampath, Cisco
