BN
TechAI Desk•1 views

Cerebras Targets $3.5B Raise in Nasdaq IPO Amid AI Boom

AI chipmaker Cerebras is targeting a $3.5 billion capital raise via an IPO on the Nasdaq, planning to sell 28 million shares priced between $115 and $125. The company has strategically shifted its model from hardware sales to cloud services, a move that prompted a temporary halt to its 2024 listing plans. Financially, Cerebras reported Q4 revenue of $510 million, marking a 76% year-over-year increase. Crucially, the company secured a major contract with OpenAI to supply over $20 billion worth of AI computing power through 2028.

Ad slot
Cerebras Targets $3.5B Raise in Nasdaq IPO Amid AI Boom

AI chipmaker Cerebras is aiming to raise up to $3.5 billion through an upcoming Initial Public Offering (IPO) on the Nasdaq exchange. The company plans to sell 28 million shares, with the price set between $115 and $125 per share, according to an updated prospectus filed recently.

IPO Details and Valuation

Based on the proposed share range, the IPO could value Cerebras at up to $26.6 billion. This contrasts with a previous venture round in February, which valued the company at $23 billion, with Advanced Micro Devices listed as an investor.

  • Shares Offered: 28 million
  • Price Range: $115 - $125 per share
  • Potential Valuation: Up to $26.6 billion

Strategic Shift and Market Context

Cerebras has adjusted its business strategy, shifting focus from purely selling hardware to operating a cloud service utilizing its proprietary chips. This pivot prompted the company to withdraw its initial 2024 IPO plans before refiling in April.

Ad slot

In the current investment climate, few technology companies have gone public since central banks began raising interest rates in 2022, which has dampened investor appetite for unprofitable firms. However, the rapid advancement of generative AI, exemplified by tools like OpenAI's ChatGPT, has fueled investor interest in companies positioned to benefit from this trend.

Major Contracts and Financial Performance

Cerebras has secured significant contracts that underpin its current valuation and future growth:

  • OpenAI Deal: In January, Cerebras announced a deal to provide up to 750 megawatts of AI computing power to OpenAI through 2028, valued at over $20 billion.
  • Recent Revenue: In the fourth quarter, Cerebras reported a 76% year-over-year revenue increase, reaching $510 million. The company also posted a net income of $87.9 million for the period.

Insider Holdings and Proceeds

According to the filing, Cerebras' co-founder and CEO, Andrew Feldman, will retain 10.3 million shares post-IPO, valued at up to $1.28 billion at the high end of the range. Furthermore, the company has an option to sell an additional 4.2 million shares to underwriters, which could generate an extra $525 million in proceeds at the high end of the range.

Ad slot