Cerebras Upcoming IPO: Computing going Public amidst AI fever

This article was updated on October 4, 2024 following Cerebras' S-1 filing on September 30, 2024.

In the latest iteration of the AI boom, chipmaker and AI platform company Cerebras appears to be planning for an initial public offering (IPO), having filed its Form S-1 registration statement with the SEC at the end of September. ²

The filing does not specify a share price or estimated proceeds, but Renaissance Capital reported that Cerebras could raise up to an estimated $800 million through the IPO.³

Cerebras has also not specified a target IPO date, though Bloomberg reported in August that the AI company was eyeing an IPO as soon as October.⁴ Considering that the underwriting process typically takes a few months, however, that could push a Cerebras IPO toward the end of 2024 or early 2025, provided there are no delays.

Cerebras will trade on Nasdaq under the ticker symbol "CBRS."⁵ Citigroup and Barclays are the lead underwriters, with UBS, Wells Fargo, TD Cowen, Needham & Company, Craig-Hallum, Wedbush Securities, Rosenblatt, and Academy Securities also acting as underwriters.⁶

Cerebras: company background

While AI fervor has picked up in the last couple of years, Cerebras has deep roots within the tech/computing world.

The company was founded in 2016 by a team of industry veterans, including current Chief Executive Officer Andrew Feldman and Chief Technology Officer Gary Lauterbach. ⁷ Feldman and Lauterbach previously founded a microserver startup called SeaMicro, which was acquired by semiconductor company AMD in 2012.⁸

Cerebras' three other co-founders — Jean-Philippe Fricker, Michael James, and Sean Lie — also held prominent roles at SeaMicro.⁹

Feeding demand

The rise of generative AI, particularly OpenAI's ChatGPT, helped fuel tremendous growth in certain tech companies that power AI computing. Nvidia is perhaps the most prominent example of this boon, with the chip maker's stock price rising over 190% over the past year.¹⁰

Cerebras competes with Nvidia, but rather than producing relatively small Graphic Processing Units (GPUs) to process AI workloads like Nvidia does, Cerebras has created the world's largest computer chip with its flagship product, the third generation wafer-scale engine (WSE-3).¹¹

Cerebras also has its hands in related AI areas, like with its CS-3 system, powered by its flagship chip, that other companies can use to run AI workloads.¹²

Amidst the demand for AI hardware and platforms, Cerebras' revenue has been rapidly growing, having more than tripled from 2022 to 2023 to reach $78.7 million. For the first half of 2024, it nearly doubled its full-year 2023 revenue, reaching $136.4 million, according to the S-1 filing.

Cerebras also has partnerships in place with significant organizations to support AI development, such as with the announcement in early 2024 that Cerebras is working with Mayo Clinic for AI in healthcare.¹³ It also announced in September the signing of a Memorandum of Understanding (MoU) with Saudi Arabia's state-owned energy giant Aramco to work together to bring AI to various industries and universities in Saudi Arabia.¹⁴

However, Cerebras is not yet profitable, largely due to high expenses in areas such as research and development. For the first half of 2024, its net loss was $66.6 million, down from $77.8 million in the first half of 2023.¹⁵

Cerebras stock price history

Cerebras' Forge Price is $36.47 as of late September, implying a $7.14 billion valuation, which represents nearly a 150% premium to its last funding round. ¹⁶ Forge Price is a derived data point that reflects the up-to-date price performance of venture-backed, late-stage companies, and is calculated based on a proprietary model incorporating pricing inputs from primary funding round information, secondary market transactions, and indications of interest (IOIs) on Forge.

Zooming out, Cerebras has dramatically outperformed the broader Enterprise Software sector, which includes many AI companies, and the Forge Private Market Index, a broad measurement that reflects the up-to-date performance and pricing activity of venture-backed, late-stage companies that are actively traded in the private market. In the last year, Cerebras has gained 221.9% compared to the Forge Private Market Index, which is down -2.7%. ¹⁷

Cerebras funding history and private market valuation

Cerebras' funding totals over $1.1 billion. That financing haul dates back to a Series A in May 2016, when the company raised nearly $27 million at a valuation of a little over $67 million. Cerebras then reached unicorn status with its Series D in November 2018, when it hit a post-money valuation of $1.8 billion. Three years later, it broke $4 billion with its Series F.¹⁸

Most recently, Cerebras raised another $420 million in June 2024 in a Series F-1, though this round was at a lower valuation of $2.87 billion.¹⁹

Some of Cerebras' top investors include Alpha Wave Ventures, which led its Series F, alongside the Abu Dhabi Growth Fund and G42, which is a tech conglomerate that Cerebras has also partnered with to build supercomputers. ²⁰

Other investors include Altimeter Capital, Benchmark, Coatue Management, Eclipse Ventures, Foundation Capital, and Vy Capital, among others.²¹

Looking ahead

Cerebras' potential IPO plans reflect the optimism of a strong AI market. Although the exact details, such as the timing and pricing of a possible Cerebras' IPO remain publicly unknown, the S-1 filing appears to show that Cerebras is getting close to going public.

Check back here or take a look at Forge’s upcoming IPO calendar to stay in the loop about a possible Cerebras IPO and other pending public offerings.

If you’re interested in investing in private companies like Cerebras before they go public, read more about pre-IPO investing or register on Forge Markets today to get started.