Report: Investors' enthusiasm is high, "hot chip IPO" Cerebras considering a significant increase in its IPO pricing range

AI chip design company Cerebras Systems is considering a significant increase in the price range for its initial public offering (IPO), as strong investor demand continues to drive up the company's valuation for going public.

Reuters reported on May 10 that Cerebras is considering raising the IPO price range from the previous $115 to $125 per share to $150 to $160 per share, an increase of approximately 28%. At the same time, the company also plans to increase the number of shares issued from 28 million to 30 million. If the final price is set at $160 per share, Cerebras' IPO fundraising scale will reach approximately $4.8 billion.

The strong demand was evident even before the official roadshow kicked off. As Bloomberg previously reported, investor subscription intentions had already exceeded $10 billion before the official marketing began. According to informed sources, Cerebras was expected to raise the price range to between $125 and $135 per share as early as Monday this week. However, the latest report from Reuters indicates that the actual increase may far exceed this expectation.

This IPO is expected to be completed this Thursday, at which point Cerebras' valuation is expected to reach approximately $35 billion, making it one of the most notable listings in the recent AI infrastructure investment boom.

Demand is booming, and the pricing has been revised upward repeatedly.

The rapid upward adjustment of Cerebras' IPO pricing reflects the current market's high enthusiasm for the concept of AI infrastructure. According to Reuters, citing informed sources, the direct driving force behind the adjustment of the pricing range was the oversubscription from institutional investors.

This trajectory is quite similar to the listing path of cloud computing company CoreWeave last year. According to The Information, a technology media outlet, CoreWeave went public at $40 per share a year ago. Despite numerous ups and downs along the way, its closing price last Friday reached $114.

CoreWeave is still in a stage of massive cash burn and is accelerating the expansion of its data center network. However, investors have shown considerable tolerance for this - this precedent indicates that when evaluating AI-related targets, Wall Street often prefers to set aside the pressure of profitability and prioritize the AI exposure.

It is reported that Cerebras is also facing the reality of continuous losses, but the strong subscription demand shows that investors are viewing the company with a similar logic.

Meanwhile, it is reported that Cerebras' decision to go public at this time is driven by its market logic.

According to The Information's analysis, we are currently at the peak of optimism regarding AI infrastructure, but the shortage of computing power persists - the recent computing power procurement agreement between Anthropic and SpaceX is a case in point.

This tight supply and demand situation provides a strong valuation support for companies related to AI infrastructure. Cerebras' upcoming IPO will be an important market test: under the current AI chip landscape dominated by NVIDIA and surrounded by giants, how many emerging AI-focused chip design companies can the public market accommodate? Investors' answer will be revealed this Thursday.

The AI chip market is crowded, and Cerebras' differentiated narrative

Despite the high market sentiment, Cerebras will still face a structural challenge after going public: the competition in the AI chip market is already quite fierce.

It is reported that chip buyers, mainly cloud computing companies and large AI developers, now have a rich array of choices. Nvidia dominates the market, while AMD, Google, and Amazon have all launched their own AI chips. Meta and Microsoft are also developing their own chips, and in the Chinese market, there are multiple suppliers such as Huawei.

Against this backdrop, Cerebras' core selling point lies in its customer base and partnership layout. OpenAI is both its client and shareholder, although OpenAI is simultaneously collaborating with Broadcom to develop its own chips. Additionally, Cerebras has reached an agreement with Amazon Web Services (AWS) to supply chips as a supplementary provider to Amazon's Trainium AI chips.

It is worth noting that some of the similar AI chip start-ups have chosen the route of selling or licensing.

It is reported that Groq has licensed its technology to Nvidia, which has also recruited the company's core talents; Meta, on the other hand, has poached a group of key engineers from another chip startup, Graphcore. The Information points out that Cerebras still has the possibility of being acquired after going public.

Risk Warning and Disclaimer Clause

Investing involves risks. Please exercise caution. This article does not constitute personal investment advice and has not taken into account individual users' specific investment objectives, financial situations or needs. Users should consider whether any opinions, views or conclusions in this article are suitable for their particular circumstances. Any investment made based on this article is at your own risk.