Nvidia Chipmaking Rival and AI Startup Cerebras Systems Files for IPO

Investors would be forgiven if they've never heard of Cerebras Systems. The start-up believes that artificial intelligence (AI) workloads "require purpose-built silicon," and further suggests that "modifying existing compute architectures [will] not realize AI's potential."

Cerebras has created a solution it believes will displace Nvidia's graphics processing units (GPUs) as the dominant force in AI and has filed an S-1 with the Securities and Exchange Commission (SEC) to go public as early as next month.

Image source: Getty Images.

A new kid in town

Cerebras originally planned its initial public offering (IPO) last year but shelved its plans after raising $1 billion in private markets. The company plans to go public on the Nasdaq exchange, using the ticker "CBRS." Cerebras hasn't yet said how many shares it plans to issue, the price of those shares, or how much it plans to raise. The company plans to go public sometime in mid-May.

Cerebras created the Wafer-Scale Engine (WSE) -- a massive semiconductor that the company says is 58 times larger than Nvidia's B200 AI chip. The WSE combines 900,000 compute cores, boasts "19 times more transistors, 250 times more on-chip memory, and 2,625 times more memory bandwidth" than Nvidia's B200. For context, multiple Nvidia AI chips are linked together to work in unison, so this represents a novel approach.

Cerebras says it solves the inherent latency problem that plagues AI processing. The company says that "communications is thousands of times faster on-chip than across chips," so by keeping all the processing on a single giant chip, it avoids the latency issue.

This solution has attracted a number of high-profile customers. Earlier this year, Cerebras inked a $20 billion, 750 megawatt deal with OpenAI. It has also entered into a multi-year deal with Amazon Web Services (AWS) to use Cerebras chips in its data centers for AI inference. Terms of the deal weren't disclosed, but it could serve as a validation of Cerebras' approach.

Show me the money

Perhaps the most intriguing aspect of Cerebras is its financial results. In 2025, revenue of $510 million grew 76% year over year, while generating net income of $238 million -- but that comes with an asterisk.

The company generated an operating loss of $146 million, but benefited from $391 million in "other income," resulting from the remeasurement of a contract liability that was removed from its balance sheet. In other words, it had nothing to do with the company's operations. Without that benefit, the company's net loss would have been roughly $153 million.

Cerebras reported remaining performance obligations (RPO) of $25 billion as of Dec. 31, of which the company expects to recognize 15% in 2026 and 2027, 43% in 2028 and 2029, and the remainder thereafter.

Finally, Cerebras has a complicated multiclass share structure with three classes of common stock. Class A shares carry one vote per share and will be issued to the public. Class B shares are entitled to 20 votes per share and will be held by early investors and insiders, who will retain majority voting control. Additionally, the company issued warrants to OpenAI and Amazon, allowing them to buy up to $1.27 billion in non-voting Class N shares.

To buy or not to buy...

We don't have all the details and won't know more until Cerebras files a revised S-1 with the SEC. Until then, investors should remember that while the company certainly has potential, there are risks as well. Cerebras hasn't yet been subjected to the glare of the public spotlight, and it isn't yet profitable.

Furthermore, just two customers accounted for 86% of the company's revenue in 2025, the very definition of customer concentration risk. As Cerebras gains more converts, that risk should moderate, but it's worth noting nonetheless.

As such, investors interested in acquiring a stake should make it a small part of a well-balanced portfolio.

Danny Vena, CPA has positions in Amazon and Nvidia. The Motley Fool has positions in and recommends Amazon and Nvidia. The Motley Fool has a disclosure policy.