Cerebras reveals revenue surge in US IPO filing, aims to challenge Nvidia in AI chip market

By Manya Saini and Pritam Biswas

(Reuters) -Cerebras Systems, a startup competing with industry leader Nvidia for a slice of the lucrative AI chip market, said late on Monday its revenue surged more than threefold in 2023, in a filing to go public in the U.S.

Initial public offerings in the U.S. have bounced back in 2024 after a two-year dry spell, driven by growing hopes of a soft landing and stocks trading at record highs. Analysts see more gains ahead as investor sentiment improves and expect AI firms to lead the charge for tech listings.

Cerebras' revenue surged to $78.7 million in the 12 months ended Dec. 31 versus $24.6 million a year earlier. Loss narrowed to $2.92 per share compared with $4.28 apiece.

The company said 83% of its total annual revenue came from AI tech group G42, which is partly owned by Abu Dhabi's sovereign investor Mubadala. In the IPO prospectus, Cerebras listed its commercial relationship with G42 among the key factors that can affect its performance.

Citigroup and Barclays are the lead underwriters of the offering. It is looking to list on the Nasdaq and trade under the ticker symbol "CBRS".

While Cerebras is yet to reveal the terms of its IPO, Bloomberg News, citing sources, reported late last month it could seek to raise up to $1 billion.

AI RACE

The Silicon Valley startup will seek out investors for the share sale at a time when investor enthusiasm for all AI-linked chip companies remains robust. In its IPO prospectus, Cerebras said it expects the AI computing market to grow to $453 billion in 2027 from $131 billion in 2024.

"It seems fair to suggest that we could see a new wave of tech companies coming to market, given previous appetite for innovation among investors in the States," Dan Coatsworth, investment analyst at AJ Bell, told Reuters.

"Anything AI-related should have an easy story to tell and investors love a good narrative when they're seeking new opportunities."

Nvidia's stock has seen a monster rally this year, surging around 140%, solidifying its position as one of the world's most valuable companies. Its advanced hardware helps OpenAI develop the underlying software that powers apps such as ChatGPT.

Cerebras is betting its roughly foot-wide chip can outperform Nvidia's hardware, which is a cluster of thousands of chips stitched together.

In August, Cerebras launched a tool for AI developers that allows them to access the startup's outsized chips to run applications, which it said was a much cheaper option than Nvidia processors.

(Reporting by Pritam Biswas and Manya Saini in Bengaluru; Editing by Devika Syamnath and Krishna Chandra Eluri)