AI chipmaker Cerebras targets $3.5 billion raise in IPO

Cerebras, a prominent player in the artificial intelligence chip sector, is preparing to go public on the Nasdaq with ambitions to raise up to $3.5 billion. According to a recent prospectus filed by the company, it plans to offer 28 million shares priced between $115 and $125 each. If these shares sell within that range, Cerebras could achieve a valuation of approximately $26.6 billion during its initial public offering. Earlier this year, Cerebras secured a venture round that valued the company at $23 billion, with notable support from investors including Advanced Micro Devices. The tech IPO landscape has been relatively quiet since central banks raised interest rates in 2022, which led to a decrease in investor appetite for unprofitable businesses. However, the surge in generative AI technologies, like OpenAI's ChatGPT, has sparked renewed interest in companies poised to capitalize on this trend. Cerebras’ main competitor, CoreWeave, which offers cloud services leveraging Nvidia graphics processing units, successfully raised $1.5 billion in its IPO last year. Cerebras aims to differentiate itself with its proprietary chips, which serve as an alternative to Nvidia's widely used GPUs. Originally, Cerebras intended to launch its IPO in 2024 but withdrew its filing as it shifted its focus from hardware sales to operating a cloud service based on its innovative chips. After revisiting its public offering plans, the company refiled for an IPO in April. In a significant partnership, Cerebras announced in January that it would supply OpenAI with up to 750 megawatts of AI computing power through 2028, a deal valued at over $20 billion. The company reported a remarkable 76% year-over-year revenue growth in the fourth quarter, totaling $510 million, alongside a net income of $87.9 million. Andrew Feldman, co-founder and CEO of Cerebras, will retain his shares during the IPO, holding 10.3 million shares that could be valued at up to $1.28 billion if priced at the high end. Furthermore, Cerebras has the option to issue an additional 4.2 million shares to underwriters post-IPO, potentially generating another $525 million in proceeds at the upper price point. As the AI landscape continues to evolve, Cerebras stands poised to play a pivotal role in the future of computing.