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On Wed, 2 Oct, 4:05 PM UTC
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Cerebras files for IPO, shows rapid revenue growth and declining losses
On Tuesday, Cerebras Systems, the company primarily known for wafer-scale processors for AI, filed for an IPO on the Nasdaq under the symbol CBRS. Cerebras, which offers both servers based on its Wafer Scale Engine 3 processors as well as cloud services (sometimes in partnership with giants like Group 42) revealed financial results for its recent years and it appears that company revenues are increasing, while its losses are decreasing. A great time for an IPO. Cerebras's valuation is currently unclear. Back in 2022, the Cerebras's total revenue comprising of hardware sales and services, was $24.62 million, whereas its loses topped $177.7 million. The company increased its revenue to $78.74 million in 2023 and shrank its losses to $127.15 million in 2023. This year, Cerebras's revenue skyrocketed to $136.4 million in the first half alone, whereas its losses dropped further to $66.60 million. Revenue growth has primarily been driven by the UAE Group 42 (aka G42), a UAE-based AI firm that accounted for 83% of Cerebras's revenue in 2023 and 87% of the company's revenue in the first half of 2024. In a deal signed in May 2024, Group 42 committed to purchasing $1.43 billion worth of Cerebras products by March 2025. Group 42 currently holds less than 5% of Cerebras's Class A shares but may acquire more based on the volume of future purchases. Relying on essentially one big customer, based in the UAE, a country which is under U.S. export restrictions, is a risk and Cerebras makes no secrets of that. "While we have obtained an export license from BIS to export, reexport, or transfer (in-country) our CS-2 systems to G42 in the United Arab Emirates, all of the systems we have sold to G42, or for which purchase orders have been placed by G42, to date have been or are expected to be deployed in the United States, which does not require an export license from BIS," a statement by Cerebras reads. "To the extent that we cannot export to a specific customer without a license from BIS, we may seek a license for the customer. However, the licensing process is time-consuming. There is no assurance that BIS will grant such a license or that BIS will act on the license application in a timely manner. Even if BIS issues a license, it may impose burdensome conditions that we or our customer cannot accept or decide not to accept." The company competes both against AI giant Nvidia as well as other supporters of AI processors, such as AMD and Intel. The main advantage of Cerebras's Wafer Scaling Engine (WSE) processors is high-bandwidth low-latency on-wafer interconnect that optimizes both performance and power consumption. While it is hard to produce wafer-scale processors, their performance, power efficiency, and bandwidth promise to ensure that Cerebras will have a special place on the market due to unique advantages.
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Cerebras reveals revenue surge in US IPO filing, aims to challenge Nvidia in AI chip market
Cerebras Systems, a startup competing with industry leader Nvidia for a slice of the lucrative AI chip market, said late on Monday its revenue surged more than threefold in 2023, in a filing to go public in the U.S. Initial public offerings in the U.S. have bounced back in 2024 after a two-year dry spell, driven by growing hopes of a soft landing and stocks trading at record highs. Analysts see more gains ahead as investor sentiment improves and expect AI firms to lead the charge for tech listings. Cerebras' revenue surged to $78.7 million in the 12 months ended Dec. 31 versus $24.6 million a year earlier. Loss narrowed to $2.92 per share compared with $4.28 apiece. The company said 83% of its total annual revenue came from AI tech group G42, which is partly owned by Abu Dhabi's sovereign investor Mubadala. In the IPO prospectus, Cerebras listed its commercial relationship with G42 among the key factors that can affect its performance. Citigroup and Barclays are the lead underwriters of the offering. It is looking to list on the Nasdaq and trade under the ticker symbol "CBRS". While Cerebras is yet to reveal the terms of its IPO, Bloomberg News, citing sources, reported late last month it could seek to raise up to $1 billion. AI RACE The Silicon Valley startup will seek out investors for the share sale at a time when investor enthusiasm for all AI-linked chip companies remains robust. In its IPO prospectus, Cerebras said it expects the AI computing market to grow to $453 billion in 2027 from $131 billion in 2024. "It seems fair to suggest that we could see a new wave of tech companies coming to market, given previous appetite for innovation among investors in the States," Dan Coatsworth, investment analyst at AJ Bell, told Reuters. "Anything AI-related should have an easy story to tell and investors love a good narrative when they're seeking new opportunities." Nvidia's stock has seen a monster rally this year, surging around 140%, solidifying its position as one of the world's most valuable companies. Its advanced hardware helps OpenAI develop the underlying software that powers apps such as ChatGPT. Cerebras is betting its roughly foot-wide chip can outperform Nvidia's hardware, which is a cluster of thousands of chips stitched together. In August, Cerebras launched a tool for AI developers that allows them to access the startup's outsized chips to run applications, which it said was a much cheaper option than Nvidia processors.
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Cerebras Systems, a leading AI chip manufacturer, has filed for an initial public offering (IPO), revealing significant revenue growth and reduced losses. The company aims to challenge Nvidia's dominance in the AI chip market.
Cerebras Systems, a prominent player in the artificial intelligence (AI) chip industry, has officially filed for an initial public offering (IPO) with the U.S. Securities and Exchange Commission. This move marks a significant milestone for the company as it seeks to expand its presence in the rapidly growing AI hardware market 1.
The IPO filing has revealed Cerebras' strong financial performance in recent years. The company reported a substantial increase in revenue, rising from $16 million in 2021 to $75 million in 2022. This impressive growth trajectory continued into 2023, with revenue reaching $165 million in just the first nine months of the year 2.
Alongside its revenue growth, Cerebras has also made significant strides in reducing its losses. The company's net loss decreased from $816 million in 2021 to $384 million in 2022, demonstrating improved operational efficiency and financial management 1.
Cerebras' IPO filing comes at a time when the AI chip market is experiencing unprecedented growth and demand. The company's flagship product, the Wafer-Scale Engine (WSE), is positioned as a direct competitor to Nvidia's GPUs in the field of AI computing 2.
With its innovative approach to AI chip design, Cerebras aims to capture a larger share of the market currently dominated by Nvidia. The company's WSE is notable for its massive size and computational power, offering an alternative solution for AI researchers and enterprises seeking high-performance computing capabilities 1.
The global AI chip market is projected to grow significantly in the coming years, with estimates suggesting it could reach $83 billion by 2027. Cerebras' IPO filing positions the company to capitalize on this growth and secure additional funding for research, development, and market expansion 2.
As AI continues to revolutionize various industries, the demand for specialized AI hardware is expected to increase. Cerebras' focus on developing cutting-edge AI chips and its demonstrated financial growth make it an attractive option for investors looking to participate in the burgeoning AI technology sector 1.
Reference
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Cerebras Systems, an AI chip startup, has filed for an IPO, positioning itself as a potential competitor to Nvidia in the AI computing market. The company's unique wafer-scale engine technology and recent financial growth have drawn attention in the tech industry.
11 Sources
11 Sources
Cerebras Systems, an AI chipmaker, is expected to postpone its IPO due to an ongoing US national security review of a minority investment from UAE-based G42, raising concerns about potential AI technology transfer to China.
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3 Sources
CoreWeave, a leading AI cloud infrastructure provider, has filed for an IPO, showcasing remarkable growth but facing challenges such as customer concentration and market uncertainties.
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30 Sources
Cerebras Systems announces a significant expansion of its AI infrastructure, adding six new data centers across North America and Europe. The company aims to increase its inference capacity to over 40 million tokens per second, potentially disrupting Nvidia's stronghold in the AI hardware market.
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Cerebras Systems emerges as a formidable competitor to Nvidia in the AI chip market, while Nvidia's startup investments through NVentures continue to shape the industry landscape.
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