DAILY SITUATION RECAP: Nvidia launches the Open Secure AI Alliance in order to find and fix vulnerabilities using open-source AI, sort of like an open Project Glasswing. Founding partners include a mix of enterprise software companies (Databricks, Salesforce, IBM, SAP, Siemens, Snowflake), cybersecurity companies (Palo Alto Networks, Red Hat), open-source providers (Hugging Face, LangChain, OpenClaw, Nous, the Linux Foundation), AI labs (SpaceXAI, Thinking Machines, Cognition), and other major companies (Nvidia, Microsoft, Cisco, Palantir, Dell). Moonshot AI releases the Kimi K3 weights and technical report after eleven days since launch. Kimi K3 is a 2.8T parameter mixture-of-experts (MoE) model with 104B active parameters and a 1M token context window. Moonshot also open-sourced much of their infrastructure, including their attention kernels, agent environment platform, and MoE communication library. Just because you can download it in theory doesn’t mean you actually can — the model is far too big to be run on any consumer hardware. Nvidia invests $5B in Ilya Sutskever’s SSI. Sutskever, formerly co-founder and Chief Scientist of OpenAI, founded Safe Superintelligence in 2024 with the sole goal of building a safe superintelligence, with no other products along the way. It has since raised $3B at up to a $32B valuation (likely higher now). SSI is famously very secretive about its research, but Sutskever said it’s “focused on overlooked aspects of how the human brain functions”. The new funding, and access to Nvidia Vera Rubin GPUs, will allow SSI to 10x its compute. More companies sign on to Nvidia’s open source letter. The letter, posted by Jensen Huang on Friday, advocates for a robust American open-source ecosystem with minimal government regulation. New signatories include Google, SpaceXAI, OpenAI, AMD, Cisco, Palo Alto Networks, Nebius, Scale, Fireworks AI, Baseten, Cohere, Sakana AI, Periodic Labs, Core Automation, OpenClaw, and GitHub. Every major American frontier lab except for Anthropic has now signed. CXMT stock surges 466% on its first trading day. The company, formerly ChangXin Memory Technologies, is the largest memory manufacturer in China and the fourth-largest in the world (after SK Hynix, Samsung, and Micron), with a 9% global market share. It now has the second-highest market cap of any Chinese company after Tencent. CXMT doesn’t make the most leading-edge HBM for AI chips, but supplies DRAM to consumer tech manufacturers and data centers. Nvidia may guarantee $250-350B of financing for an OpenAI data center. SB Energy, a subsidiary of SoftBank, is developing a massive 10 GW data center on federal land in Ohio at a total cost of over $500B. The financing guarantee would allow SB Energy to borrow money at lower rates, and possibly allow OpenAI to spend more on Nvidia chips. China begins manufacturing DUV machines. Deep ultraviolet (DUV) lithography machines print intricate nanoscale patterns on silicon wafers, a critical step in chipmaking. The new machines, built by an unnamed state-backed company, will be shipped to local chipmakers including SMIC, Hua Hong Semiconductor, and CXMT. China is still behind on the most advanced extreme ultraviolet (EUV) lithography, which is solely produced by Dutch company ASML. ASML stock fell 6% on the news. Dario Amodei explains Anthropic’s position on open models: open-weight models without dangerous capabilities are a public good, and Anthropic has never supported a full ban. However, we should be worried about the CCP using them for repression, as well as cyber/bio/alignment risk. To that end, we should not sell chips to China, crack down on distillation, and require mandatory safety testing for all sufficiently capable open and closed models. China threatens to respond if the US sanctions their AI labs. The Chinese Ministry of Commerce said US accusations of distillation were “smears” and that China will “take all necessary measures” to defend its rights and interests against any action that substantively harms them. DeepSeek has suspended its recent funding round after comments from a private investor call with CEO Liang Wenfeng were leaked. Written by @theojaffee. Read more at our link in bio.

CISCO SEES Q1 ADJUSTED EPS OF $1.32-$1.34 VERSUS $1.17 EXPECTED AND Q1 REVENUE OF $18.0 BLN-$18.2 BLN VERSUS $16.84 BLN, AND SEES FY2027 ADJUSTED EPS OF $5.05-$5.11 VERSUS $4.84 EXPECTED ON REVENUE OF $72.2 BLN-$73.4 BLN VERSUS $69.13 BLN.

CISCO POSTED Q4 ADJUSTED EPS OF $1.22, ABOVE THE $1.17 ESTIMATE, WITH REVENUE OF $17.3 BLN VERSUS $16.85 BLN EXPECTED, PRODUCT REVENUE OF $13.46 BLN VERSUS $13.03 BLN, AN ADJUSTED GROSS MARGIN OF 66.3% AND REMAINING PERFORMANCE OBLIGATIONS OF $46.73 BLN, WHILE REPORTING Q4 AI HYPERSCALER ORDERS TOTALING $4 BLN.

CISCO $CSCO Q4’26 EARNINGS HIGHLIGHTS 🔹 Revenue: $17.3B (Est. $16.82B) 🟢; +18% YoY 🔹 Non-GAAP EPS: $1.22 (Est. $1.17) 🟢; +23% YoY 🔹 Adj. Oper Margin: 35.9% 🔹 Adj. Oper Income: $6.2B (Est. $5.85B) 🟢 Raises FY27 Guide: 🔹 Revenue: $72.2B-$73.4B (Est. $68.69B) 🟢 🔹 Adj. EPS: $5.05-$5.11 (Est. $4.80) 🟢 Q1 Guide: 🔹 Revenue: $18.0B-$18.2B (Est. $16.8B) 🟢 🔹 Adj. EPS: $1.32-$1.34 (Est. $1.16) 🟢 🔹 Adj. Gross Margin: 65%-66% 🔹 Adj. Oper Margin: 35.5%-36.5% Segment Revenue: 🔹 Networking: $9.79B; +28% YoY 🔹 Security: $2.23B; +14% YoY 🔹 Collaboration: $1.17B; +12% YoY 🔹 Observability: $275M; +6% YoY Other Q4 Metrics: 🔹 Product Orders: +35% YoY, +25% ex-hyperscalers 🔹 Networking Orders: +40% YoY, 8th straight double-digit qtr 🔹 AI Infra Orders: $4B in Q4, $9.3B in FY26 🔹 RPO: $46.7B; +7% YoY 🔹 Operating Cash Flow: $5.4B; +27% YoY Capital Return: 🔹 Dividend: $0.42/share 🔹 Returned $3.2B to shareholders in Q4 Comments: 🔸 “In fiscal 2026, Cisco achieved its highest productivity metrics in 30 years measured by revenue, non-GAAP operating margin, and earnings per employee.”

Cisco ($CSCO) reports earnings today after the close. The Street wants non-GAAP EPS of $1.17 on $16.8B in revenue, up about 15% year over year. The stock sits near its 52-week high with analysts targeting $130, and after four straight beats the earnings market prices another at 90%.