• HPE says there is growing demand for cloud-based AI services so it’s on a push to prepare for that demand.
• This week HPE announced its intention to acquire Juniper Networks for $14 billion.
• Upon completion of the acquisition, revenue to HPE’s networking business is expected to represent 31 percent of HPE’s total revenue.

Artificial intelligence continues to garner massive investments as we move into a new calendar year. This week, Hewlett Packard Enterprise (HPE) announced its intention to acquire Juniper Networks.

The acquisition would see HPE paying $40 per share representing about $14 billion in value to acquire Juniper Networks. That’s a lot of scratch but HPE appears to believe its worth it and its push into the AI sector.

“HPE’s acquisition of Juniper represents an important inflection point in the industry and will change the dynamics in the networking market and provide customers and partners with a new alternative that meets their toughest demands,” HPE president and chief executive officer, Antonio Neri, said in a press statement.

“This transaction will strengthen HPE’s position at the nexus of accelerating macro-AI trends, expand our total addressable market, and drive further innovation for customers as we help bridge the AI-native and cloud-native worlds, while also generating significant value for shareholders. I am excited to welcome Juniper’s talented employees to our team as we bring together two companies with complementary portfolios and proven track records of driving innovation within the industry,” added Neri.

Upon completion of this acquisition, HPE expects to nearly double its networking business with the revenue derived from the division growing from 18 percent of the firm’s revenue to 31 percent. As HPE tells it, there has been a surge in demand for secure technology that analyse data from the edge to cloud. The firm has responded by improving its product portfolio while also preparing for an increase in demand for AI.

The goal here is to deliver a secure end-to-end AI-native solution built on a “foundation of cloud, high performance, and experience-first”.

The computational power required to power AI models and platforms is immense. This demand can put tremendous strain on the platforms that power AI and as such, firms such as HPE need to be prepared for the strain this can add to infrastructure. In that context, $14 billion to help sure up your systems is a small price to pay.

It’s not known how HPE’s acquisition will impact jobs at Juniper Networks but CEO Rami Rahim will lead HPE’s combined networking business upon completion of the transaction.

“We have successfully delivered exceptional user experiences and simplified operations, and by joining HPE, I believe we can accelerate the next phase of our journey. In addition, this combination maximizes value for our shareholders through a meaningful all-cash premium. We look forward to working with the talented HPE team to drive innovation for enterprise, service provider and cloud customers across all domains, including campus, branch, data center and the wide area network,” Rahim said in a statement.

Let’s see how this investment serves HPE.