In a recent development reported by Reuters, Hewlett Packard Enterprise (HPE) is reportedly in the final stages of negotiations to acquire Juniper Networks, with the potential deal valued at $13 billion. The completion of the deal is anticipated as early as this week, marking a significant move for HPE into the burgeoning artificial intelligence (AI) market.
Primarily recognized for its role as a data center equipment vendor and cloud services provider, HPE aims to strengthen its position in the AI sector. Notably, the company was engaged by the UK government for the construction of the nation’s most powerful AI supercomputer. Last year, HPE entered the cloud computing arena with a service tailored for AI applications, intensifying competition with industry giants such as Amazon, Microsoft, and Google.
Juniper Networks, the potential acquisition target, has a notable presence in the AI landscape through its Mist AI service. Leveraging machine learning algorithms, Mist AI enhances users’ wireless experiences. Despite media reports, neither HPE nor Juniper Networks has officially commented on the ongoing discussions.
Following the news, HPE witnessed a 7.7% decline in its shares, while Juniper Networks experienced a substantial 21% surge in extended trading. The strategic move comes amid Juniper Networks’ recent restructuring efforts, which involved laying off 440 employees at a cost of $59 million. This decision, constituting 4% of the total workforce, followed the company’s disappointing Q2 results, revealing a substantial 78% year-on-year revenue decrease.
Juniper Networks attributed its restructuring to the challenging macro-economic environment, anticipating continued impacts on customer spending. The company remains focused on adapting to market conditions and is poised for a potential transformation through the proposed acquisition by HPE. As the negotiations reach their final stages, industry observers are keenly awaiting an official statement from the involved parties.