There’s Another AI-Powered IPO in the Works. Here’s What You Should Know.

Planned IPOs could offer investors more ways to get into the AI space.
Credit: Angela Weiss / AFP via Getty Images

Key Takeaways

The IPO pipeline is starting to fill up with AI names. Cerebras Systems, which makes processors for running advanced artificial intelligence models, is the latest waiting in the wings. Cerebras' retail roadshow featured an endorsement from Sam Altman chief of OpenAI, one of the chipmaker's customers.

Artificial intelligence startups are coming soon—to a stock exchange near you.

Investors may be fixated on some of the highest-profile names, such as OpenAI and Anthropic. But other companies are moving close to listings too, among them Cerebras Systems, a chipmaker that aims to take on Nvidia (NVDA). It would appear to be the right time, since risk appetite has returned as investor fears about the war in Iran have been subsumed by renewed optimism that AI will be the Next Big Thing.

Cerebras on Monday re-submitted its initial public offering documents with the Securities and Exchange Commission—it initially filed in October, then withdrew—aiming to sell 28 million shares at a price between $115 and $125 apiece.At the high end of that range, Cerebras' IPO would raise some $3.5 billion, and its implied market capitalization would be over $26 billion. The company's private valuation tripled earlier this year from roughly $8 billion to about $23 billion.

WHY THIS MATTERS TO INVESTORS

There's a growing line of private AI companies looking to go public, and that doesn't just mean expected mega offerings from OpenAI and Anthropic. Those listings will shed new light on the inner workings of the AI sector, and could offer more opportunity and options for investors too.

Cerebras' retail roadshow featured an endorsement from Sam Altman, founder of OpenAI, which Cerebras counts as a customer and partner. "We believe Cerebras is the best high-speed inference offering in the world right now. And it's hard to overstate how important high-speed inference is," Altman said, referring to a process where a trained AI model makes a prediction or solves a task on data it hasn't seen before. Cerebras' slide deck compares its inference speed with that of Nvidia's GPUs, saying leading open-source models are 15 times faster on Cerebras; the company also said its hardware competes against the chip giant, but also Advanced Micro Devices (AMD), Intel (INTC), and Big Tech companies including Amazon (AMZN), Microsoft (MSFT), Alphabet (GOOGL), and Oracle (ORCL).

Cerebras is profitable. Last year it pulled in revenue of about $510 million and $237.8 million in profits, its IPO document shows. Shares of Digi Power X (DGXX), an energy infrastructure company with a market cap of around $400 million, soared yesterday after announcing a 10-year data center deal with Cerebras; the stock remains aloft and has risen more than 10% so far Wednesday.

Story Continues

AMD is an investor, and Amazon's AWS a partner. OpenAI has a warrant for 33.5 million Cerebras shares at an exercise price of a fraction of a penny, with vesting tied to equipment purchase milestones, according to company documents.

Cerebras plans to list on the Nasdaq under the symbol "CBRS."

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