Cisco Adds Tokenomics to Splunk to Cut AI Costs

Cisco Systems, Inc. integrated Tokenomics capabilities into its Splunk Agent Observability tool to help enterprise customers manage the operating costs of AI agents. The new feature enables users to identify expensive workflows and compare the cost of various AI models against their quality, allowing companies to switch to more affordable models to lower token expenses.

The move comes as the company seeks to stabilize its software segment, where observability revenue has declined. While Cisco reported a 22% growth in networking revenue, it faces significant financial pressure from high upfront AI infrastructure investments, including inventory purchase commitments totaling $17.17 billion.

Cisco intends to use these monitoring features to drive recurring subscription growth and improve cash conversion. By providing tools to optimize AI spending, the company aims to sustain its valuation and offset the costs associated with its aggressive AI infrastructure expansion.