Nvidia rival Cerebras raises $1bn at $23bn valuation

Cerebras Systems, the ambitious AI chipmaker positioning itself as a direct challenger to Nvidia’s dominance, has just secured a staggering $1 billion in its latest funding round—nearly tripling its valuation in just over four months. This massive Series H round, led by Tiger Global with participation from AMD, values the company at approximately $23 billion, a remarkable leap from its $8.1 billion post-money valuation in September 2024.

The funding round also saw contributions from a star-studded lineup of investors, including Benchmark, Fidelity Management and Research Company, Atreides Management, Alpha Wave Global, Altimeter, Coatue, and 1789 Capital, among others. This follows Cerebras’ previous $1.1 billion raise in September, which had already positioned the company as a serious contender in the AI hardware space.

Interestingly, this funding announcement comes on the heels of Cerebras’ decision to withdraw from a planned Initial Public Offering (IPO) late last year. While the company did not provide an official reason for the withdrawal, it coincided with scrutiny over its heavy reliance on a single customer, the Microsoft-backed G42, based in the United Arab Emirates. Despite this, Cerebras has reaffirmed its intention to go public as soon as market conditions and strategic priorities align.

The new capital injection significantly bolsters Cerebras’ ability to compete with Nvidia, the undisputed leader in AI chips. Cerebras has long claimed to build the “fastest AI infrastructure in the world,” and CEO Andrew Feldman has repeatedly asserted that its hardware can run AI models multiple times faster than Nvidia’s offerings. Central to this claim is the company’s WSE-3 chip, which Cerebras touts as the “largest” AI chip ever built. With 19 times more transistors and 28 times more compute power than Nvidia’s B200, the WSE-3 is a technological marvel designed to push the boundaries of AI performance.

Cerebras’ ambitions extend beyond hardware. The company has forged a high-profile partnership with OpenAI, a relationship underscored by the involvement of OpenAI CEO Sam Altman as an early investor in Cerebras. Last month, the two companies announced a groundbreaking collaboration to deploy 750 megawatts of Cerebras’ wafer-scale systems, aimed at making OpenAI’s chatbots faster and more efficient. This partnership highlights OpenAI’s growing interest in diversifying its AI infrastructure beyond Nvidia, though it’s worth noting that OpenAI remains a significant customer of Nvidia’s technology.

In fact, OpenAI’s strategy appears to be one of balance rather than replacement. Last year, the company signed a 6-gigawatt agreement with AMD to power its AI infrastructure, with the first 1-gigawatt deployment of AMD Instinct MI450 GPUs set to begin in the second half of 2026. At the time, Altman described the deal as “incremental” to their work with Nvidia, emphasizing that OpenAI plans to increase its Nvidia purchasing over time.

Cerebras’ meteoric rise and strategic partnerships underscore the intensifying competition in the AI chip market. As companies like OpenAI seek to reduce their reliance on a single supplier, Cerebras is well-positioned to capitalize on this shift. With its cutting-edge technology, high-profile partnerships, and now a war chest of $1 billion, Cerebras is not just challenging Nvidia—it’s redefining what’s possible in AI infrastructure.

As the AI arms race heats up, all eyes will be on Cerebras to see if it can deliver on its bold promises and carve out a significant share of the market. For now, one thing is clear: the future of AI hardware is anything but predictable, and Cerebras is determined to be at the forefront of this technological revolution.

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