Cerebras Systems Inc., the high-powered computer chip startup taking on Nvidia Corp. in the artificial intelligence industry, has reportedly filed confidential paperwork with U.S. securities regulators ahead of an initial public offering on the Nasdaq stock exchange.

That’s according to The Information, which today cited an unnamed person involved in the decision as saying that the IPO is likely to take place later this year.

The company is a producer of specialized and powerful computer chips that are designed to handle AI and high-performance computing or HPC workloads. It has made a number of headlines over the past year, claiming that its chips are not only more powerful than Nvidia’s graphics processing units, but also more cost-effective.

Nvidia has grown to become the world’s most valuable company — though it slipped from that perch today — on the back of a generative AI craze that shows no signs of slowing down. As businesses around the world race to integrate powerful AI tools into their systems and applications, they have been buying up GPUs by the thousands, boosting Nvidia’s data center revenue by more than 400% over the last year.

Nvidia faces very few rivals, but Cerebras is one of them. Its flagship product is the new WSE-3 processor, which was announced in March and builds upon its earlier WSE-2 chipset that debuted in 2021.

A powerful alternative to Nvidia’s GPUs

The Cerebras WSE-3 chip is expected to become available later this year. It’s built on an advanced five-nanometer process and features 1.4 trillion transistors more than its predecessor chip, with more than 900,000 compute cores and 44 gigabytes of onboard static random-access memory.

According to the startup, the WSE-3 has 52 times more cores than a single Nvidia H100 GPU. The chip will be made accessible as part of a data center appliance called the CS-3, which is about the same size as a small refrigerator. The WSE-3 chip itself is about the size of a pizza, and comes with integrated cooling and power delivery modules.

In terms of performance, the Cerebras WSE-3 is said to be twice as powerful as the WSE-2, capable of hitting a peak speed of 125 petaflops, with one petaflop equal to 1,000 trillion computations per second.

Cerebras says those specifications are more than enough for the WSE-3 to compete with Nvidia’s best GPUs. It says its chips are superior, able to enhance the efficiency of AI workloads by processing them more rapidly and with less power.

Last month, Cerebras showcased the capabilities of its older WSE-2 hardware when it partnered with researchers from Sandia, Lawrence Livermore and Los Alamos national laboratories to perform atomic-scale materials simulations at the millisecond scale. In a research paper, the company showed it was able to perform those simulations an incredible 179 times faster than the world’s most powerful supercomputer, Frontier, which is equipped with 39,000 Nvidia GPUs.

“No number of GPUs can get this result,” Andy Hock, senior vice president of product and strategy, told SiliconANGLE last month. “We’re unlocking fundamental new timescales for molecular dynamics.”

Huge potential

Cerebras’ status as one of the few chipmakers that can realistically compete with Nvidia should make it a red-hot bet for investors, considering the impressive gains its rival has made over the past year. Nvidia’s stock has multiplied by more than ninefold since the generative AI era kicked off in late 2022 with the launch of OpenAI’s ChatGPT. If Cerebras really can compete as well as it claims, it has the potential to make a similar splash on Wall Street, said Holger Mueller of Constellation Research Inc.

“With Nvidia just becoming the most valuable publicly traded company on the planet, it’s ironic that the competition is stepping up at around exactly the same time, and it’s not only coming from its traditional rivals in the chip industry,” Mueller said. “Cerebras can be a potential competitor to Nvidia that offers a differentiated approach to the way it builds and sells its chips, and it seems likely to attract the funding it needs to become a player in the AI chip race.”

To entice investors further, The Information’s source revealed, Cerebras has notified regulators in Delaware, where the company is incorporated, that it will create preferred shares for an impending F1 round a “steep discount” compared to its last funding round, making the offering even more attractive.

Chip startup Cerebras has filed confidentially for an IPO. It also authorized new shares for an impending “F-1 round” at a steep discount to its prior round.

Scoop w/ @steph_palazzolo: https://t.co/zG2ihysIth

— natasha mascarenhas (@nmasc_) June 20, 2024

Although Cerebras itself has been coy about its IPO plans, Bloomberg previously reported that it has chosen Citigroup as the lead bank for its listing. It settled on the lender after holding numerous discussions with potential advisers on the IPO. That report said the company is targeting a listing in the second half of 2024 at the earliest, and will seek a valuation above the $4 billion figure it achieved following its most recent $250 million Series F funding round in 2021.

The Information’s source said the exact details of Cerebras’ IPO are not set in stone, and it may change its plans depending on how many more investors it attracts.

Photo: Cerebras Systems