Cerebras secures $1.1 billion at an $8.1 billion valuation, boosting AI chip production and delaying its IPO while preparing to rival Nvidia in the AI hardware market.
AI chipmaker Cerebras filed to go public exactly a year ago. The company has yet to take the plunge, but has now bought itself more time to stay private.
Cerebras said Tuesday that it’s raised $1.1 billion in new funding at a valuation of $8.1 billion as it tries to take on Nvidia, the world’s most valuable company, in the booming market of artificial intelligence chips.
In its IPO prospectus, Cerebras describes itself as a designer of chips for training and running AI models. The company has prioritized operating a cloud-based service that AI models can utilize to handle incoming queries.
Shortly after Cerebras filed for its initial public offering last September, the company faced public criticism for being too reliant on a single Middle Eastern customer, G42. Cerebras hit a snag seeking clearance from the Treasury Department’s Committee on Foreign Investment in the U.S., or CFIUS, to give G42 a bigger position.
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Despite the lengthy delay, private market investors are bullish enough to about double the company’s valuation from $4 billion in 2021. Co-founder and CEO Andrew Feldman said in an interview that Cerebras still intends to go public.
“I don’t think this is an indication of a preference for one or the other,” he said. “I think we have tremendous opportunities in front of us, and I think it’s good practice, when you have enormous opportunities, not to let them fall by the wayside for lack of capital.”
Feldman told reporters in May that the startup aspired to go public in 2025.
Numerous high-valued AI companies are raising substantial sums of money in the private market.
Databricks, a provider of data analytics software, recently announced that it had closed a $1 billion funding round, valuing the company at over $100 billion. OpenAI announced last week that Nvidia plans to invest up to $100 billion in the company as it expands its data centers. Anthropic, meanwhile, announced earlier in September that it had raised $13 billion in funding at a valuation of $183 billion.
Investors in Cerebras’ funding round include 1789 Capital, Alpha Wave, Altimeter Capital, Atreides Management, Benchmark, Fidelity, Tiger Global and Valor Equity Partners.
“It was with investors whom everybody would be proud of to have as a cornerstone for your IPO,” Feldman said. The new money will allow for an expansion in U.S. manufacturing, he said.
After Taiwan Semiconductor Manufacturing produces Cerebras’ chip wafers, they’re packaged in the U.S. As demand increases, Cerebras plans to hire more people to focus on production.
“We increased manufacturing capacity in the last 18 months 8x, and we are going to go another 4x in the next six or eight months,” Feldman said.
Feldman declined to talk about recent financials. The company generated approximately $70 million in revenue during the second quarter of 2024, compared to less than $6 million in the same period a year earlier.
This year, Cerebras has discussed business that it’s picked up from Hugging Face, Meta, Notion and Perplexity.
