Andrew Feldman, founder and CEO of Cerebras Systems, speaks at the Collision conference in Toronto on June 20, 2024.
Ramsey Cardy | Sports File | Conflict | Getty Images
Artificial intelligence chip startup Cerebras Systems on Monday filed its prospectus for an initial public offering, with plans to trade under the ticker symbol “CBRS” on Nasdaq.
Cerebras competition Nvidiaits image processing units are the industry’s choice for training and running AI models. Cerebras says on its website that its WSE-3 chip comes with more cores and memory than Nvidia’s popular H100. It’s also a physically large chip. In addition to selling chips, Cerebras offers cloud-based services that rely on its computing clusters.
Cerebras had a net loss of $66.6 million in the first six months of 2024 on sales of $136.4 million, according to the filing. In the first six months of 2023, the company had a net loss of $77.8 million and $8.7 million in sales.
For the full year 2023, Cerebras reported a net loss of $127.2 million on $78.7 million in revenue.
The company reported a net loss of $50.9 million on revenue of $69.8 million in the second quarter, compared to a loss of $26.2 million and a profit of $5.7 million in the same period last year.
Operating expenses increased this year in part due to higher labor costs to support revenue growth, the company said.
AI chips are a growing and crowded market. Cloud providers Amazon, Google again Microsoft they have developed their own AI chips. The company said Group 42, a UAE-based AI company that counts Microsoft as an investor, accounted for 83% of Cerebras’ revenue last year.
Cerebras’ WSE-3 chip is one example of new silicon from upstarts designed to use and train artificial intelligence.
Cerebral Systems
In addition to Nvidia, Cerebras cites AMD, Intel, Microsoft and Google as competitors, “as well as integrated circuits for custom applications and various independent companies.”
Taiwan Semiconductor Manufacturing Company makes Cerebras chips. Cerebrus warned investors that any disruption to the supply chain could hurt the company.
Cerebras was founded in 2016 and is based in Sunnyvale, California. Andrew Feldman, founder and CEO of the startup, sold the first server to SeaMicro AMD for $355 million in 2012.
The company said that by 2021 it was worth more than 4 billion dollars on 250 million dollars. G42 currently owns less than 5% of Cerebras’ Class A shares, and the company has an option to buy more depending on how much of Cerebras’ product it buys.
The tech IPO market was generally subdued in 2024, as high interest rates pushed investors into profitable assets. Social media app Reddit went public on the New York Stock Exchange in March, and data management software maker Rubrik followed in April. Earlier this month, the Federal Reserve went ahead with its first rate cut since 2020, leading to gains in the tech-heavy Nasdaq Composite index.
Neither Morgan Stanley nor Goldman Sachs, the two leading technology investment banks, are part of the deal. Citigroup and Barclays led the offering.
The largest investor in Cerebras is venture capital firm Foundation Capital, followed by Benchmark and Eclipse Ventures. Alpha Wave, Coatue and Altimeter each hold at least 5% as well, according to the filing. Other investors include OpenAI CEO Sam Altman and Sun Microsystems founder Andy Bechtolsheim. The only person who owns 5% or more is Feldman.
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