In 2024, Cerebras filed to go public. In 2025, the company withdrew its IPO. And yesterday, Cerebras hit the public markets, at long last.
The chipmaker, which designs and manufactures AI inference chips, has long billed itself as an Nvidia challenger, and its first day stock pop certainly reflected Nvidia-mania: Cerebras shares rocketed 70% by market close.
The factors that ruffled prospective investors in 2024 seem, for now, far in the rearview mirror. At the time, there were concerns around customer concentration, Cerebras’s ties to UAE-connected G42, and CEO Andrew Feldman’s own distant past. (Feldman pled guilty to accounting fraud in the 2000s at a previous company.) Now, though, the company’s multi-billion partnership with OpenAI, also a shareholder, seems to be key to the company’s momentum and future prospects. I asked Feldman on Thursday about the key differences in the company between today and 2024.
“We’re a stronger company,” he told Fortune. “I think we have bigger customers. We have more deployments. Our technology’s more mature. I think we have a better roadmap… We told the world we’d win a big customer like G42 and we’d learn from it. They were a billion-dollar customer and everyone said ‘you have only one.’ But we were ready, and in a position to move quickly.”
Karl Alomar, managing partner at Cerebras investor M13, says the company’s biggest challenge from here is “execution at scale.”
“Cerebras has proven demand from hyperscalers, but they need to prove they can manufacture at volume, deliver on time, and support multiple customers at the same operational level Nvidia does,” he said via email, adding that recent softness in the secondary market for Cerebras is illustrative of this risk. “Investors want to see concrete customer wins and production schedules, not just OpenAI.”
Still, Eric Vishria, general partner at early backer Benchmark, says there’s absolutely room for many winners in chips.
“The demand for compute and inference is not slowing down,” said Vishria via email. “So… maintaining hardware execution and speed are their moat… When I look forward, I ask myself: how big is the market for slow anything? Slow internet, slow search, slow streaming—ultimately everything gets really fast, and fast tends to win.”
Feldman is candid: No one knows how big this market really is, he says. One back-of-the-envelope calculation:
“There are 47 million software engineers in the world,” said Feldman. “If each one uses $100,000 of tokens a year, that’s nearly $5 trillion from just a single use case. Do that bottoms-up and you go, ‘Holy crap.’”
I suspect that from here, there are only two directions for Cerebras: In a year, it will have ripped, becoming one of the few high-profile venture-backed IPOs to truly rise to the occasion for retail investors. Or it will go in the direction of Figma, down more than 80% since its hype-y first day. Something measured is off the table.
Today’s numbers, dazzling as they are, aren’t the real test. But, my gosh, what a first day.
See you Monday,
Allie Garfinkle X: @agarfinks Email: [email protected]
Submit a deal for the Term Sheet newsletter here.
Joey Abrams curated the deals section of today’s newsletter. Subscribe here.
The post Cerebras soars almost 70% by market close in a true blockbuster IPO appeared first on Fortune.
