AI demand won’t be incremental; it will be exponential: Cisco’s Daisy Chittilapilly

Three decades after entering India, Cisco is deepening its commitment to the country beyond its traditional role as a technology market. From making India its second-largest R&D hub globally and expanding manufacturing ahead of schedule to investing in cloud infrastructure and AI capabilities, the networking giant sees the country as central to both its global operations and future growth.

In an interview with Fortune India, Daisy Chittilapilly, president, Cisco India & South Asia, said why India has become a strategic hub for Cisco, the company's AI roadmap, the next phase of digital infrastructure, and why she believes India's biggest opportunity in AI lies not in building models but in developing sector-specific applications.

Excerpts:

Cisco has been in India for nearly three decades. Why does India matter to Cisco and how do you see it evolving in the next decade?

Daisy Chittilapilly: We were one of the earliest companies to bet on India and the reasons for that continue to be very strong. We came to India in 1995 for the market, but quickly realised this was a place for great talent that could differentiate Cisco. That led us to start our R&D centre in 1998.

Today, that centre has grown to about 16,000 people. It has evolved from supporting one product group to having every product group and every function at Cisco present here. It is also a centre of excellence for supply chain. The last piece to come to India was our manufacturing plant, almost two years ago. So now, every part of Cisco is present in India.

India is a very important destination from where we build capabilities for Cisco, our customers and our partners. It is also a high-growth market, both generally and for Cisco. So, it meets both sides of the equation: what India is for Cisco and what Cisco is for India. A large R&D ecosystem creates a wider knowledge ecosystem, and our partners benefit from the business we do here. We have maintained that balance well, and that's a hard assessment we make of ourselves.

You have also entered in manufacturing recently. Why the pivot?

We are always looking to diversify our supply chain, and we also recognise India's concerns around sovereignty. Manufacturing was a natural extension of our 30-plus years in the country. We consider ourselves glocal. It also aligned with the country's Make in India ambition, and we were asked to contribute by bringing in a plant.

The plant is not just servicing India. It is a true hub in our supply chain, as much an export hub as it is a domestic one.

How much will manufacturing contribute?

It's not a direct correlation between what we manufacture and how we grow because we don't manufacture all our products in any one factory in the world. We have a very distributed supply chain. The products we make here certainly serve the market, but we can't attribute all of our growth in India to what we manufacture in the country.

How does manufacturing change India's position within Cisco?

We started with one product line and have already added two more, ahead of schedule. That's probably the best proof that the facility is a success. We had a planned timeline for introducing products, and we're ahead of that plan. Two years is still young in the life of a manufacturing plant, but we're ahead of schedule in terms of production.

What kind of investments are being made in India today, how are they being deployed, and how do you see that scaling over the next decade?

As I mentioned, our R&D facility is our second-largest site in the world, and that requires significant investment. The manufacturing plant is another major investment. The third area is the cloud assets we are bringing into India.

We make great hardware, but we also make software that's delivered on the cloud or on premise. In India, customers need both models, so we are bringing in the cloud infrastructure required to serve them.

More data centre investments are also coming into India. On the networking side, we have the Meraki India region. We have a number of security products serving data centres in the country. On the collaboration side, we have recently introduced two calling data centres because we see customer service, where India has always been at the forefront, being transformed by agentic AI. We've also brought the Webex Contact Center Cloud into India.

We also pride ourselves on being glocal, so our investments go beyond the business. Our Country Digital Acceleration programme is now in its third phase. The purpose is to test new ideas in production and demonstrate the power of technology in daily life. As part of that, we have delivered almost 125 pilots, spanning connected cities to cybersecurity centres of excellence.

Our skilling programme is one of the oldest in the country. We have trained 3 million students to date, with 95% employability, meaning participants gain access to better technology jobs or education opportunities than they would have otherwise.

On the purpose front, we achieved our goal of positively impacting 50 billion lives ahead of schedule in 2025. We've now pivoted to our 40 Communities initiative, under which Mumbai became the first international community outside the US. As part of that, we've invested in the CII Centre in Mumbai, which focuses on skilling.

The broader point is that our investments are not just about Cisco's presence in India. They're about answering the larger question of what Cisco means to India.

When it comes to AI infrastructure, Nvidia, Broadcom, HP, everybody is investing in AI infrastructure in India. They're also investing in educating employees, so what differentiates Cisco?

Connectivity is a big part of the data centre conversation. Everyone understands connectivity inside the data centre, but there's also connectivity from data centre to data centre and from the data centre to enterprise data. On that front, we're the only networking provider certified across every major AI ecosystem.

But the bigger part of differentiation comes from our ability to actually bring in security at every level of the AI. Cisco operates across the entire AI stack, from our own silicon to application software, allowing us to embed security at every layer of AI. That's what differentiates us from many other players.

What percentage of Cisco's future revenue growth do you expect from AI-related demand?

hat is not a number we are forecasting at this point in time because we don't think AI is going to be a standalone thing. We've not believed for a while that AI exists in abstraction. We think it's going to be an AI empowered world.

Yes, there will be standalone AI applications, but there will also be AI embedded in everything we already do. We already have AI assistants across all our portfolios. They're an additional capability built into products we've been selling for many years. That's one part of AI which is already in the monetization system. Think of it as an additional capability that is in the things we already do.

At the same time, we also have standalone AI products such as AI Defense, which helps enterprises identify AI models, detect vulnerabilities, prevent external attacks and stop models from going rogue. So we have both AI embedded into existing products and standalone AI offerings, but neither works without the underlying infrastructure.

We expect AI to have an additive effect across everything we do. While data centres dominate the public conversation, we also expect workplace and workforce transformation, along with digital resilience, to become important growth drivers.

Where does Cisco see the biggest growth opportunities in the AI era?

We’ve clearly positioned ourselves as the company building the critical infrastructure for AI. But infrastructure shouldn’t be interpreted narrowly. It’s much more than servers or data centres.

Connectivity becomes increasingly important as AI workloads grow. Models require higher throughput, lower latency and much more efficient movement of data across distributed environments. That’s where networking becomes fundamental. Beyond infrastructure, we believe growth will come from three major areas.

The first is AI-ready data centres. The second is digital resilience, which extends beyond traditional cybersecurity to ensuring entire digital environments remain secure and operational. The third is workplace and workforce transformation, where organisations rethink how employees work alongside AI.

Initially, the market naturally focuses on building data centres. Over time, attention shifts towards connecting those data centres, linking them with enterprise networks and securing the entire ecosystem. Security becomes absolutely essential once organisations move from experimentation into production.

You simply cannot deploy AI at scale without embedding security across every layer—from silicon to software. On top of that, AI applications will continue creating additional opportunities across industries.

How do you determine your AI investments and what kind of ROI are you seeing, even internally?

There are some places where we have real material metrics. One enterprise application has been in our Technical Assistance Center. By introducing AI-powered self-service, we've achieved 60% case avoidance. Of the cases that do come to our centres, more than 80% are first handled by an AI assistant before being smoothly transitioned to a human agent if required. Resolution times have improved by two to four times, depending on the complexity of the case. That's a very material use case for us.

Personally, the most exciting application is cybersecurity. We see about 886 billion security threats every day. Talos, our commercial threat-hunting engine, is the second-largest threat-hunting engine in the world outside the US Federal system. AI helps us sift through those threats and correlate low-level events that could otherwise be ignored but have the potential to cascade into major incidents.

We've opened AI tools to employees across the company, depending on their function; but we are keeping a very sharp eye on what use cases are enterprise wide. Our own enterprise has also moved to AIOps, which is why we believe AI will play a major role in digital resilience.

The biggest shift we're seeing now is that companies have moved beyond experimentation. They're starting to measure the ROI of AI pilots and asking how to move from pilot to production.

Are you seeing the same shift among your customers? Are they able to materialise ROI?

Agentic AI definitely; in customer service is one area. Cyber resilience is another. We also see adoption in banking and financial services, fraud management, marketing through hyper-personalisation, particularly in B2C, as well as legal and finance functions. We use many of these use cases ourselves and see customers adopting them too. Fraud management, fraud detection and cybersecurity already have measurable business outcomes.

Is there any sector that's still underestimating AI or struggling to scale it?

I see some of our own partners, including ₹500 crore companies, actively thinking about how AI can differentiate them and make their sales cycles more effective. They're experimenting with models and asking questions around model diversification. I don't think any business that wants to be around for the next 10 years is going to underestimate AI.

From a global perspective, does India have the innovation capability to build AI solutions?

I think India's strength will be in sector-specific AI applications. Sarvam is a good example of what's possible with a sovereign LLM.

Having been the IT services capital of the world for many years, India has deep sectoral knowledge. My personal bet is that we'll have an edge in AI applications, particularly those that rely on domain expertise. AI isn't taking away the need for highly skilled engineers or designers. Sectoral knowledge will become an even bigger differentiator.

Today, the focus is on infrastructure because that's where the AI journey begins. But over time, value will shift to use cases, and use cases are delivered through AI applications. That's where I believe India's sweet spot will be.

Do you think the AI market is already factored in? Or is the boom not over yet?

No (AI market is not factored in). This isn't just the case with AI. Traditional markets that grow incrementally are generally easier to size. But any new market is rarely sized correctly in its early days because those estimates are based on historical intelligence. We are still very, very early in the AI cycle, so I'd hesitate to say that any market sizing available today is absolutely accurate.

Do you think SaaS companies need to transform themselves to keep pace?

here's no secret that vertical integration is happening. If you're bringing out a product, you have to deliver value that nobody else can, whether it's AI or not. AI also gives companies the ability to disrupt existing markets very quickly.

We're still in the early days and haven't yet seen all the new learning models that will emerge because of AI. There will be disruption, and the most adaptable companies will survive.

There is a lot of discussion around Agentic AI. Do you think the technology is being overhyped, or is it genuinely ready for enterprise adoption?

I think Agentic AI is very real. The question isn’t whether it works. It clearly does. The real question is how quickly organisations will move it from pilot projects into production, and which use cases will prove most valuable.

From Cisco’s perspective, we’re already seeing enough evidence that agentic systems will become an important part of enterprise technology. One simple example illustrates the scale of change.

An AI agent performing a task can generate roughly 450% more network load than a human carrying out the same activity. That’s because an AI agent never sleeps. It operates continuously and processes information at a completely different speed.

This gives you a sense of the exponential nature of AI. That’s also why I believe it’s still too early to make very precise predictions about how large this market will become. We can estimate the direction of travel, but putting exact numbers around it today would be premature.

What does that exponential growth mean for AI infrastructure?

The infrastructure requirements will increase dramatically. Take computing as an example. Historically, India’s server market hovered around the one-billion-dollar mark. But when you have nearly 70 billion dollars of announced data centre investments, it’s obvious the computing market won’t remain at those historical levels.

Even if you simply add together the large projects already announced, it’s clear that infrastructure demand will be several times larger than what we’ve seen historically. That’s why I believe we’re underestimating the scale of this transition.

The demand created by AI won’t be incremental. It will be exponential.

Looking beyond AI, what other emerging technologies is Cisco preparing for?

AI is obviously one of the biggest technology shifts we’re experiencing today. But it’s certainly not the only one.

We’re already preparing for the next wave, particularly quantum computing. That means rethinking connectivity, security and encryption for a post-quantum world. India has already articulated ambitions around becoming quantum secure by the end of this decade.

From our perspective, quantum represents another exponential technology transition, particularly in cybersecurity. So we’re effectively preparing for two major technology shifts happening within a relatively short period of time. Both AI and quantum computing will require organisations to rethink how they build, secure and operate digital infrastructure.

AI is expected to transform the workforce. Do you believe it will replace jobs, or simply change the nature of work?

We don’t believe AI is simply about replacing people. Our view is that work itself will be reimagined. At Cisco, we describe it as a human-plus-AI future. People will continue to play a central role, but they’ll increasingly need to know how to work effectively with AI. That’s why we’ve made AI tools broadly available across the organisation.

Regardless of your role, AI fluency will become an essential skill. Interestingly, we’re seeing the same mindset among many of our smaller partners as well. Even organisations with a few hundred employees are actively thinking about AI literacy, redesigning workflows and integrating AI into everyday work.

We’re still in the early stages of that transformation, but the shift has clearly begun.

What does workforce transformation actually mean in practice?

Technology has never remained static. I’ve been with Cisco for more than two decades. If I were relying only on the knowledge I had twenty years ago, I simply wouldn’t be able to meet the expectations of our customers today.

Continuous learning has always been part of the technology industry. AI simply accelerates that need. Businesses evolve because customer expectations evolve. Employees therefore have to evolve alongside the business.

If you look at Cisco India, our workforce has remained broadly stable at around 15,000 to 16,000 employees for many years. But the work those employees perform today is completely different from what they were doing when our India operations first began.

That’s the important point. The future isn’t necessarily about fewer people. It’s about different skills. New categories of jobs will emerge. Existing roles will evolve. Some responsibilities will disappear, while entirely new ones will be created. Change is never easy. But I believe this transition will happen across every industry—not just Cisco. The organisations and individuals that continuously learn and adapt will be the ones that thrive in the AI era.