AI Chip Startup Blaize Prepares for Nasdaq Debut Amid Industry Hype

The surge in interest surrounding Nvidia and its dominance in the artificial intelligence chip industry has set the stage for emerging players to make their mark. Among them, Blaize, a company founded by former Intel engineers, is gearing up to go public. The company is set to list on the Nasdaq via a SPAC merger, as announced on Monday, marking a significant milestone in the AI chip startup landscape.

AI Chip Startup Blaize Prepares for Nasdaq Debut Amid Industry Hype
AI Chip Startup Blaize Prepares for Nasdaq Debut Amid Industry Hype

The surge in interest surrounding Nvidia and its dominance in the artificial intelligence chip industry has set the stage for emerging players to make their mark. Among them, Blaize, a company founded by former Intel engineers, is gearing up to go public. The company is set to list on the Nasdaq via a SPAC merger, as announced on Monday, marking a significant milestone in the AI chip startup landscape.

Founded in 2011, Blaize has raised $335 million from major investors, including Samsung and Mercedes-Benz. Based in El Dorado Hills, California, the company has carved out a niche in manufacturing AI chips specifically designed for edge applications. Unlike chips that are predominantly used in large-scale data centers, such as those produced by Nvidia, Blaize’s technology is geared towards integration in products like security cameras, drones, and industrial robots.

Dinakar Munagala, the company’s CEO and a former Intel executive with nearly 12 years of experience, emphasized the growing importance of AI-powered edge computing. He noted that its advantages, such as “low power consumption, low latency, cost-effectiveness, and data privacy,” make it a crucial part of the industry’s future.

Despite its ambitious goals, Blaize remains a small player in the competitive AI chip market. The company reported a significant loss of $87.5 million on revenues of just $3.8 million in 2023, according to its prospectus. This financial strain highlights the capital-intensive nature of chip manufacturing, which requires substantial investment before scaling becomes feasible. Munagala described this process as a “hockey stick” growth curve, where initial investments eventually lead to accelerated revenue increases.

The company is optimistic about its pipeline, citing $400 million in deals under negotiation. Among these is a signed purchase order worth up to $104 million with an undisclosed EMEA defense entity, potentially in the Middle East. This system is designed to identify friendly or unknown troops, detect drones, and spot small vessels, although Munagala declined to specify the exact country involved.

Following its SPAC merger, Blaize anticipates a valuation of $1.2 billion. While this figure is modest compared to the private valuations of competitors like Cerebras, which aimed to double its $4 billion valuation during a recent IPO attempt, Blaize’s focus on edge computing offers a distinct market proposition. Unlike Cerebras, which primarily targets data center applications, Blaize envisions a future where AI chips become integral to physical products and real-world use cases.

Munagala highlighted this differentiation, stating, “All of the AI hype is happening in the data center. Interestingly, they’ve totally neglected and forgotten about real physical world use cases that are very real, that are touching people’s lives and are happening now and making money.” With its upcoming listing, Blaize is betting on the growing demand for practical AI applications outside of centralized data centers.