This Firm Wants to be the ‘Next Big Disruptor’ in Networking

As demand for large language models and real-time AI applications accelerates, the constraint is no longer just chips or capital, but electricity. Across the country, data centre operators are prioritising access to power over geography, snapping up any parcel of land that can support energy-hungry compute. Questions of connectivity and architecture are dealt with later.

This scramble is quietly reshaping how AI systems will be built and deployed. Instead of a few massive data centres clustered in predictable hubs, AI capacity is spreading across smaller, distributed locations, from modular facilities to telecom sites and enterprise edges. 

This global push to scale AI has created what Shekar Ayyar, CEO of hyperscale networking software firm Arrcus, described as “a literal land grab.” Companies are acquiring any parcel of land that comes with assured electricity, and worrying about the rest later.

Ayyar said that these consolidated points do not have enough power to support all AI requirements. This scramble, he argued, is reshaping how AI infrastructure will be built. Instead of a few massive, centralised data centres, AI capacity is spreading across modular facilities, cell towers, and enterprise edges. 

That shift is pushing networking, often treated as plumbing, back to the centre of the AI conversation.

Why Networking Lags Behind Compute

Ayyar traces the current inflection point to his years at VMware, where he saw computing move from fixed, purpose-built servers to virtualised, software-defined infrastructure. “In the network industry, that opportunity is happening right now,” he said. 

“Networking is still about two, three decades behind where the compute transformation happened.”

Most enterprise and telecom networks still rely on rigid hardware boxes bought for specific functions from large vendors. That model, Ayyar argued, is incompatible with the pace of AI-led change.

“You cannot put a rigid infrastructure and hope that it will serve your purpose for the next decade or two,” he said, adding, “You have to have a software-driven infrastructure.” Arrcus positions itself as a horizontal software layer that can run across different types of networking hardware, allowing operators to adapt their networks as applications change.

Ayyar suggested that Arrcus can be applied across landscapes like a paintbrush to support all the needed applications, drawing an analogy to VMware’s early pitch.

The Innovator’s Dilemma

That approach also shapes how Arrcus sees competition. Incumbent vendors, Ayyar said, are constrained by their existing business models.

“It’s one of these innovator’s dilemma problems,” he said. “These are large, publicly traded companies. They just can’t go and say, we’re moving all that into a software-driven model architecture.”

While other startups are also working on disaggregated networks, Ayyar argued that Arrcus differentiates itself through the breadth of its production deployments, from low-end switching to high-end routing, across telecom, data centre, and enterprise environments.

The company also works across semiconductor ecosystems rather than tying itself to one.

Referring to partners such as Broadcom and NVIDIA, he said, “Our strength is that we work with both companies and frankly, other companies too.”

Opportunities in India & the IPO

The land grab narrative also ties into why Arrcus is doubling down on India. Historically, India served primarily as a technology development base. Ayyar believes that has changed.

“This is a very opportunistic time for anybody that has technology that will be instrumental in the creation, deployment and consumption of AI,” he said, adding that India is now both a producer and consumer of next-generation infrastructure.

He compared the moment to the early IT boom. “It is paramount for people to determine what’s the right skill set, and what’s the right talent pool, and what the right capability set is that needs to be built in a large population like India,” he said.

Arrcus plans to double its India headcount, expand beyond a single centre in Bengaluru, and push India towards contributing “at least sort of 10% of our total overall global book”.

The company currently works with 15–20 large customers globally and is shifting from a largely direct sales model to one driven by partnerships, including one with Fujitsu. Arrcus has formed a strategic partnership with Fujitsu to build next-generation network infrastructure for AI.

Its investor list includes Lightspeed, General Catalyst, SoftBank, Aramco, NVIDIA, Hitachi, Fujitsu and Samsung. “These are not just investors,” Ayyar said. “They should actually help us with go-to-market.”

That growth trajectory is setting the stage for a public listing, which Ayyar expects to be ready by 2027, he said. 

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