Source: Wall Street See
Cerebras, a start-up company, is preparing to go public with a current valuation of $2.5 billion.
According to The Information, Cerebras, a start-up dedicated to developing ai chips, has secretly submitted an IPO application to regulatory authorities. This marks the company's preparation for entry into capital markets.$NVIDIA (NVDA.US)$The start-up company, Cerebras, is preparing to enter the capital markets in an effort to seize market share.
Valued at $2.5 billion and reaches cash flow breakeven point.
According to reports, Cerebras is planning to create a discount preferred stock, a move that may make its stock more attractive to private investors before the IPO.
According to a document shared by Prime Unicorn Index, in early June this year, Cerebras authorized a new share price of $14.66 per share, substantially lower than the price of $27.74 per share during its 2021 F-round financing. The new stock authorization indicates that Cerebras is currently valued at approximately $2.5 billion.
Even though it is unclear whether Cerebras has formally sold these stocks and who will hold them, it is common practice to raise funds before an IPO in order to strengthen its balance sheet before public investors consider buying its stocks.
Cerebras was founded in 2016 and is headquartered in Sunnyvale, California. So far, the company has raised $720 million from investors, including Coatue Management, Benchmark, and Abu Dhabi Technology Group G42, which has commissioned Cerebras to build three supercomputers.
Cerebras stated in a blog post last December that the company has recently reached the point of cash flow breakeven, but did not disclose specific details.
According to Bloomberg's report in April, Cerebras has hired Citigroup as its lead underwriter for its IPO.
Is Nvidia's challenger coming?
Cerebras is one of the few start-ups trying to challenge Nvidia's market position. The company focuses on developing specialized chips for training AI models and cooperates with Mohamed bin Zayed University of Artificial Intelligence in Abu Dhabi as well as the medical company M42 in Abu Dhabi to develop AI models tailored for Arabic language conversational AI and medical applications.
In March of this year, Cerebras released its latest chip, the Wafer Scale Engine 3. According to the company, this chip can train AI models ten times larger than the largest models in the industry, such as OpenAI's GPT-4 or Google's Gemini. Cerebras's customers include Mayo Clinic and AstraZeneca.
However, Cerebras also faces significant challenges. In addition to direct competition with Nvidia, chip developers also need to respond to chip component shortages and ensure that their chips keep up with the rapid pace of development of AI software. Nvidia has an inherent advantage in this regard, as AI developers are accustomed to writing machine learning applications using CUDA software that only applies to Nvidia chips.
The AI stock boom led by Nvidia has also spread to other new stocks. For example, Astera Labs, which sells data center components, saw its stock price soar 76% at its first public offering in March this year and has remained above its IPO price.
According to Caplight's data, secondary market investors value Cerebras at between $4.2 billion and $5 billion. This indicates that the market is still optimistic about Cerebras's prospects, especially against the backdrop of the growing sales of AI hardware.
As Cerebras moves towards the public market, investors will closely watch how it can win a place in Nvidia's dominant market.
Editor/tolk