OpenAI signs $10B deal with chipmaker Cerebras
What's the story
AI chipmaker Cerebras has signed a major deal with OpenAI, the company behind ChatGPT. The agreement is for Cerebras to deliver up to 750 megawatts of computing power through 2028. The deal is worth over $10 billion and will help diversify Cerebras's revenue sources beyond its current major client, G42 from the UAE. G42 accounted for a whopping 87% of revenue in the first half of 2024.
Competitive edge
Cerebras's technology and market position
Cerebras has developed a powerful processor capable of training and running generative AI models. This puts it in direct competition with NVIDIA, which sells its chips to cloud providers like Amazon and Microsoft. These cloud companies then rent out the graphics cards by the hour to their clients. In October, NVIDIA's market cap surged to record $5 trillion as investors bet on continued growth in AI.
Strategic partnership
OpenAI's endorsement of Cerebras's technology
The deal with OpenAI comes after months of collaboration between the two companies. They worked together to ensure that OpenAI's gpt-oss open-weight models would run seamlessly on Cerebras silicon, as well as NVIDIA and AMD chips. Sachin Katti from OpenAI's compute infrastructure team said in a blog post that "Cerebras adds a dedicated low-latency inference solution to our platform," promising faster responses and more natural interactions.
IPO prospects
Cerebras's journey toward IPO and future plans
Cerebras filed for an initial public offering (IPO) in September 2024, revealing a revenue of nearly $70 million in Q2 2024. This was a huge jump from some $6 million in Q2 2023. However, the company withdrew its IPO paperwork in October after announcing a $1.1 billion funding round that valued it at $8.1 billion. Cerebras's client list includes Cognition, Hugging Face, and IBM, among others.