AT&T has acquired US$650 million in shares from employees and investors of Israeli software company DriveNets.

DriveNets, founded by Ido Susan and Hillel Kobrinsky, specializes in network cloud solutions and has been a long-term supplier for AT&T.

The investment allows DriveNets’ employees, founders, and investors, including Pitango and Bessemer Venture Partners, to benefit from returns on their investments.

DriveNets currently employs 450 people and is hiring an additional 100 staff.

The company has raised a total of US$587 million to date, with its latest funding round in 2022 valuing it at over US$2 billion.

The company is expanding globally, with recent deployments at Comcast and Japan’s KDDI for AI and open network initiatives.

🔗 Source: Calcalist

🧠 Food for thought

1️⃣ AT&T’s investment represents a shift in telecom infrastructure strategy

This acquisition follows AT&T’s broader strategy of investing in software-defined networking rather than traditional hardware-centric approaches.

DriveNets’ cloud-based networks already handle 52% of AT&T’s core production traffic, demonstrating the critical nature of this technology to AT&T’s operations 1.

The $650 million investment comes as AT&T plans to spend over $20 billion annually in infrastructure to expand its fiber footprint and enhance 5G coverage 2.

This shift toward network virtualization is part of a long-term evolution in telecommunications, from the regulatory changes of the 1980s that broke up the Bell System to today’s focus on software-defined networks 3.

AT&T’s approach reflects industry-wide transformations, where traditional telecommunications providers are increasingly becoming technology companies to remain competitive in the digital era.

2️⃣ The deal highlights the growing AI infrastructure market in telecommunications

The investment comes as DriveNets positions itself at the intersection of cloud networking and artificial intelligence, addressing a rapidly expanding market.