OpenAI signs $20B deal with chip start-up Cerebras
What's the story
OpenAI has signed a major deal with chip start-up Cerebras, The Information reported. The deal is worth over $20 billion over three years and could also give OpenAI an equity stake in the company. The move comes as OpenAI tries to stay ahead in the artificial intelligence (AI) race and meet increasing demand for its services.
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Earlier agreement with Cerebras
In January, OpenAI had agreed to buy up to 750 megawatts (MW) of computing capacity from Cerebras over three years. The deal was worth more than $10 billion. However, the latest commitments exceed this earlier agreement with the chipmaker.
Equity stake
Warrants for minority stake
As part of the deal, OpenAI will get warrants for a minority stake in Cerebras. Its ownership could increase as its spending rises. The report also said that OpenAI has agreed to give Cerebras about $1 billion to help fund the development of data centers that would run its AI products.
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Growing demand for computing power
The deal between OpenAI and Cerebras underscores a growing demand for computing power to run inference, the process by which AI models generate responses. This comes as companies race to develop reasoning models and applications aimed at driving wider adoption of AI technology.