Key Points
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Cerebras, an AI chip designer competing with Nvidia, is set to raise $4.8 billion in its IPO on May 14, 2023.
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The IPO price range has increased to $150-160 per share, giving the company a potential valuation of approximately $49 billion.
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Cerebras’ revenue heavily relies on two customers, OpenAI and Amazon Web Services (AWS), which account for nearly 90% of its earnings.
Cerebras is known for its Wafer-Scale Engine (WSE), designed for the computational demands of large language models. Backed by significant deals, including OpenAI’s multiyear $10 billion agreement for computational capacity, the company is generating substantial interest leading up to its public debut.
However, analysts express concerns regarding customer concentration and market competition, particularly from established players like Nvidia and AMD. At around 95 times its projected 2025 sales, investors need to be cautious about the premium pricing and potential volatility associated with the Cerebras IPO.
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