Cerebras Systems, an artificial intelligence chip startup, filed for an initial public offering with plans to trade under the ticker symbol “CBRS” on the Nasdaq. They compete with Nvidia in the AI chip market, with their WSE-3 chip offering more cores and memory than Nvidia’s popular H100. The company also provides cloud-based services utilizing their own computing clusters. Despite growing revenue, Cerebras reported a net loss of $66.6 million in the first six months of 2024.
In a crowded market, Cerebras faces competition from cloud providers Amazon, Google, and Microsoft, who have developed their own AI chips. Group 42, a UAE-based AI firm backed by Microsoft, accounted for 83% of Cerebras’s revenue last year. In addition to Nvidia, Cerebras lists AMD, Intel, Microsoft, and Google as competitors, along with internally developed custom integrated circuits and other private companies. Taiwan Semiconductor Manufacturing Company manufactures Cerebras chips, with potential supply chain disruptions posing a risk to the company.
Founded in 2016 in Sunnyvale, California, Cerebras is led by CEO Andrew Feldman, who previously sold server startup SeaMicro to AMD for $355 million in 2012. The company claimed a valuation of over $4 billion in a $250 million funding round in 2021. G42 committed to purchasing $1.43 billion in orders from Cerebras before March 2025, owning under 5% of the company’s shares, with the option to purchase more based on product purchases. The technology IPO market was subdued in 2024 due to higher interest rates favoring profitable assets.
Notable investors in Cerebras include venture firm Foundation Capital, Benchmark, and Eclipse Ventures, along with Alpha Wave, Coatue, and Altimeter owning at least 5%. Individual investors Sam Altman and Andy Bechtolsheim are also involved, with CEO Andrew Feldman holding the largest ownership stake. The IPO is being led by Citigroup and Barclays, with neither Morgan Stanley nor Goldman Sachs participating in the deal. The Federal Reserve’s rate cut in 2024 led to gains in the tech-heavy Nasdaq Composite index.
Cerebras’s financials show significant growth in revenue but continued losses, with a net loss of $127.2 million on revenue of $78.7 million in 2023. Operating expenses increased in 2024 due to higher personnel costs to support revenue growth. The company reported a net loss of $50.9 million on $69.8 million in revenue in the second quarter of 2024, compared to a $26.2 million loss and $5.7 million in revenue in the same period in 2023. Despite the challenges and competition in the AI chip market, Cerebras is pushing ahead with its IPO to fund further growth and development.
