Cerebras Systems, an artificial intelligence chip startup based in Sunnyvale, California, has filed for an initial public offering under the ticker symbol “CBRS” on the Nasdaq. The company competes with industry giant Nvidia in the AI chip market, touting its WSE-3 chip with more cores and memory than Nvidia’s popular H100. Cerebras also offers cloud-based services utilizing its own computing clusters. Despite generating $136.4 million in sales in the first six months of 2024, the company reported a net loss of $66.6 million during that period, with a net loss of $127.2 million for the full year of 2023.
In the second quarter of 2024, Cerebras reported a net loss of $50.9 million on $69.8 million in revenue, compared to a $26.2 million loss and $5.7 million in revenue in the same period a year earlier. The company attributed rising operating expenses to increased personnel costs required to support revenue growth. Cerebras faces competition not only from Nvidia but also from major tech players like AMD, Intel, Microsoft, and Google, as well as internally developed custom application-specific integrated circuits and various private companies. Taiwan Semiconductor Manufacturing Company produces Cerebras chips, making the company susceptible to supply chain disruptions.
Founded in 2016, Cerebras was valued at over $4 billion in a $250 million funding round in 2021. In May, UAE-based AI firm Group 42 committed to purchasing $1.43 billion in orders from Cerebras by March 2025. The company’s largest investors include venture firms Foundation Capital, Benchmark, and Eclipse Ventures, as well as Alpha Wave, Coatue, and Altimeter. Notable individual investors include OpenAI CEO Sam Altman and Sun Microsystems co-founder Andy Bechtolsheim. Cerebras’ CEO, Andrew Feldman, previously sold server startup SeaMicro to AMD for $355 million in 2012.
The technology IPO market in 2024 has been relatively quiet, with higher interest rates diverting investor attention towards profitable assets. Notable IPOs this year include social media app Reddit and data management software maker Rubrik. The Federal Reserve’s decision to cut rates for the first time since 2020 has led to gains in the tech-heavy Nasdaq Composite index. Citigroup and Barclays, rather than tech investment banks like Morgan Stanley and Goldman Sachs, are leading Cerebras’ offering. The company warned investors of potential supply chain disruptions that could negatively impact its operations.
Cerebras’ prospects in the AI chip market are promising, with its innovative technology and strong investor backing. Despite reporting losses, the company’s revenue growth and strategic partnerships are driving its expansion. As the tech industry continues to evolve, Cerebras will face stiff competition from established players like Nvidia, as well as emerging firms and internal chip development efforts by major tech companies like Amazon, Google, and Microsoft. The success of Cerebras’ IPO will depend on investor confidence in the company’s ability to navigate these challenges and maintain its position as a leader in AI chip technology.
