Inside Cerebras' IPO filing
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Inference chipmaker Cerebras, last valued at $23 billion, filed for an IPO with a reported $35 billion target valuation.
Why it matters: This will be eagerly watched as it's poised (again) to be the first big venture-backed AI IPO of the generative era.
- Cerebras' aim is to eventually hit a $250 billion valuation, per its new prospectus.
Behind the scenes: CEO Andrew Feldman and CTO Sean Lie are set for additional share payouts should the company reach $75 billion, $150 billion, and $250 billion in average valuation within nine years.
Zoom out: Investors worried that Cerebras' revenue was heavily concentrated in Abu Dhabi when it previously filed. The new filing appears to address that, lining up contracts with OpenAI and Amazon's AWS.
- The $20 billion OpenAI deal could potentially dwarf the size of current Cerebras annual revenue (nearly $510 million last year).
Between the lines: OpenAI doesn't need to spend the $20 billion in its agreement to receive a good chunk of a potential 10% stake in the company in return.
- OpenAI already has access to about a sixth of that stake, as part of an agreement for it to lend $1 billion to Cerebras.
- Another 17% or so of Sam Altman-led company shares in the chipmaker will vest if Cerebras maintains a $40 billion valuation on average for a month. That's not far off from the $35 billion Cerebras is seeking in the IPO — especially without three mega AI IPOs to dry up markets for other AI bets.
- OpenAI will have access to the rest of the stake if it fully buys up the 2GW of AI inference compute capacity.
Flashback: OpenAI inked a similar deal with AMD last year that also gave OpenAI an up to 10% stake in the chipmaker, also dependent on the delivery of certain GPU products and AMD's share price eventually hitting $600.
- That deal was widely seen as a way for OpenAI to finance its chip buying.
Context: The cap table of Coreweave, a cloud data center competitor, was dominated by crossover investors in its IPO last year.
- Cerebras' largest investors include Alpha Wave Ventures, Benchmark, Eclipse Ventures, Fidelity, and Foundation Capital.
The bottom line: The AI world's entanglements aren't going away.
