Cerebras Systems, the undisputed heavyweight champ of the artificial intelligence hardware sector, scored three consecutive wins in as many weeks recently. The little-known company has recently entered into a multi-year $10B+ agreement with OpenAI. This deal, valued at more than $10 billion, pledges to provide 750 megawatts of computing power. Together with a new capital raise of $1 billion, this deal has catapulted Cerebras’ valuation into the stratosphere. It currently sits at a staggering $23 billion, nearly three times its last valuation of $8.1 billion six months ago.
The deal with OpenAI is expected to boost the speed and efficiency of advanced AI inference tasks. Thanks to Cerebras’ unique and revolutionary design, its systems are able to process data more than 20 times faster than competing products. This progression is significant, not just for OpenAI. Its goal is to deliver more direct answers, even for complicated questions, so you can have a smoother, quicker experience with Google.
Benchmark Capital, the storied Silicon Valley venture firm, has been crucial in steering Cerebras on its path. Later, in 2016, the firm led Cerebras’ first institutional Series A funding round of $27 million. Earlier this spring, they did so again, leading at least $225 million of the new funding round. This major investment reflects Benchmark’s belief in both Cerebras’ business potential and its technology.
Cerebras’ amazing architecture is represented by almost the whole 300-millimeter silicon wafer, which contains 900,000 specialized cores that can work in parallel. This architecture allows the entire system to execute AI computations efficiently. Importantly, it reduces the need to continually transfer data between many discrete chip-to-chip forgoes, which is a significant challenge within other architectures. Cerebras is brash enough to assert that its tech is already better than Nvidia’s famous chips. This makes it one of the strongest competitors in the outsider electric vehicle industry.
As of the first half of 2024, G42, a United Arab Emirates-based artificial intelligence firm, represented 87% of Cerebras’ revenue. This relationship has most certainly raised the eyebrows of U.S. authorities. In response, the Committee on Foreign Investment in the United States (CFIUS) has initiated a national security review. Following the criticism, Cerebras dropped G42 from its investor roster. This decision allowed the Berkshire-controlled company to move forward with plans to launch a new initial public offering (IPO).
The agreement between Cerebras and OpenAI is expected to last until 2028, further strengthening the partnership between the two companies in pushing the boundaries of AI technology. This long-term agreement is a shining example of how growing demand for AI capabilities looks. It puts both companies in an optimal place to take advantage of their respective strengths in a changing market.
