Nvidia Stock Falls As Challenger AI Chipmaker Cerebras Files For IPO

Cerebras Systems, a high-powered AI chip startup challenging Nvidia (NASDAQ: NVDA), has filed confidential paperwork with U.S. securities regulators for an initial public offering (IPO) on the Nasdaq stock exchange. According to sources cited by The Information, the IPO is expected to occur later this year.

Following the news, Nvidia’s stock fell nearly 4% on the day.

Founded in 2016, Cerebras has secured $715 million in venture capital across six funding rounds, reaching a valuation of $4 billion during its most recent Series F round in 2021. The company’s flagship product, the WSE-3 chip, is anticipated to be available later this year. It boasts 1.4 trillion transistors, over 900,000 compute cores, and 44 gigabytes of onboard static random-access memory (SRAM).

Built on an advanced five-nanometer process, the WSE-3 is said to be twice as powerful as its predecessor, the WSE-2, with a peak performance of 125 petaflops—each petaflop equating to one quadrillion computations per second​.

Unlike traditional GPUs, the WSE-3 is housed in a data center appliance called the CS-3, roughly the size of a small refrigerator, featuring integrated cooling and power delivery systems. This design allows the WSE-3 to handle AI workloads with greater efficiency and lower power consumption. Cerebras claims that its chips are capable of enhancing AI performance significantly, providing a cost-effective alternative to Nvidia’s GPUs​.

In a demonstration of its technology, last month Cerebras partnered with researchers from Sandia, Lawrence Livermore, and Los Alamos national laboratories. They used Cerebras’ WSE-2 hardware to perform atomic-scale materials simulations at millisecond timescales, achieving speeds 179 times faster than the world’s most powerful supercomputer, Frontier, which utilizes 39,000 Nvidia GPUs.

Andy Hock, Cerebras’ Senior Vice President of Product and Strategy, highlighted the significance of this achievement, stating, “No number of GPUs can get this result. We’re unlocking fundamental new timescales for molecular dynamics.”

READ: Verses AI Secures US$10 Million Investment From UAE-Based G42

Cerebras’ recent developments include a strategic partnership with Abu Dhabi-based G42 to build the Condor Galaxy, a network of nine interconnected AI supercomputers. This project, valued at approximately $100 million per site, aims to deliver a total computing power of 36 exaflops. The first site, located in Santa Clara, has already demonstrated the capability of Cerebras’ technology to handle large-scale AI model training​.

Despite the excitement around its IPO, Cerebras has also notified regulators in Delaware of its intention to issue preferred shares at a “steep discount” compared to its last funding round. This move is designed to attract additional investors and enhance the attractiveness of the offering. Bloomberg reports that Citigroup has been appointed as the lead bank for the IPO, with a target valuation above the $4 billion mark achieved in 2021​.

Information for this briefing was found via The Information and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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