Cerebras Systems, Nvidia's Rival, Goes Public!

Cerebras Systems Inc., the high-powered computer chip startup known for taking on Nvidia Corp. in the artificial intelligence industry, has reportedly filed confidential paperwork with U.S. securities regulators in preparation for an initial public offering on the Nasdaq stock exchange. This development, as reported by The Information, cites an unnamed source involved in the decision who indicated that the IPO is likely to occur later this year.

Cerebras has made a name for itself as a producer of specialized, powerful computer chips designed to handle AI and high-performance computing (HPC) workloads. Over the past year, the company has garnered significant attention by claiming that its chips not only surpass Nvidia’s graphics processing units (GPUs) in performance but are also more cost-effective.

Nvidia has soared to become one of the world's most valuable companies, largely driven by a surge in demand for generative AI technologies. As businesses worldwide race to integrate powerful AI tools into their systems and applications, the demand for GPUs has skyrocketed, boosting Nvidia's data center revenue by more than 400% in the past year. While Nvidia faces few rivals in this domain, Cerebras has emerged as a notable contender with its flagship product, the WSE-3 processor, announced in March. This new processor builds on its predecessor, the WSE-2, which debuted in 2021.

A Strong Alternative: Cerebras WSE-3 Processor

The Cerebras WSE-3 chip, expected to become available later this year, is built using an advanced five-nanometer process and features more than 1.4 trillion transistors. It boasts over 900,000 compute cores and 44 gigabytes of onboard static random-access memory (SRAM). According to Cerebras, the WSE-3 has 52 times more cores than a single Nvidia H100 GPU. This chip will be offered as part of a data center appliance known as the CS-3, roughly the size of a small refrigerator. The WSE-3 chip itself, about the size of a pizza, comes integrated with cooling and power delivery modules.

In terms of performance, the Cerebras WSE-3 is reported to be twice as powerful as the WSE-2, achieving peak speeds of 125 petaflops, where one petaflop equals 1,000 trillion computations per second. Cerebras asserts that these specifications enable the WSE-3 to compete effectively with Nvidia's top GPUs, claiming its chips enhance AI workload efficiency by processing tasks faster and with less power consumption.

Last month, Cerebras demonstrated the capabilities of its older WSE-2 hardware through a collaboration with researchers from the Sandia, Lawrence Livermore, and Los Alamos national laboratories. Together, they performed atomic-scale materials simulations at the millisecond scale, achieving results 179 times faster than the Frontier supercomputer, which utilizes 39,000 Nvidia GPUs. “No number of GPUs can get this result,” said Andy Hock, senior vice president of product and strategy at Cerebras. "We’re unlocking fundamental new timescales for molecular dynamics."

Enormous Potential for Investors

Cerebras' status as one of the few companies capable of competing with Nvidia positions it as an attractive prospect for investors. Given Nvidia's substantial gains over the past year, Cerebras has the potential to make a significant impact on Wall Street. Nvidia's stock value has increased more than ninefold since the rise of generative AI technologies, sparked by the launch of OpenAI's ChatGPT in late 2022. If Cerebras can deliver on its promises, it could see a similar surge in investor interest.

To further entice investors, The Information's source revealed that Cerebras has notified regulators in Delaware, where the company is incorporated, of its intention to create preferred shares for an upcoming F1 round at a "steep discount" compared to its last funding round, enhancing the appeal of the offering.

Despite Cerebras' cautious approach to its IPO plans, Bloomberg previously reported that the company has selected Citigroup as the lead bank for its listing. This decision followed numerous discussions with potential advisors. The report indicated that Cerebras is aiming for a listing in the second half of 2024 at the earliest and is seeking a valuation exceeding the $4 billion mark achieved during its most recent $250 million Series F funding round in 2021.

While the exact details of Cerebras' IPO remain fluid and may change based on investor interest, the company's entry into the public market is poised to be a significant event in the tech industry, promising to shake up the dominance of Nvidia and potentially ushering in a new era of competition in AI and HPC chip technology.