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Cerebras says success hinges on UAE’s G42 as it prepares for IPO

By Megha Merani
Cerebras, which is based in California and generated $136.4m in the first six months of this year, is preparing to list on Nasdaq Cerebras
Cerebras, which is based in California and generated $136.4m in the first six months of this year, is preparing to list on Nasdaq
  • G42 contributed 87% of H1 earnings
  • AI chipmaker trebled revenue in 2023
  • Challenge to market leader Nvidia

Cerebras Systems trebled its revenue to almost $79 million in 2023, but ahead of its initial public offering the AI chipmaker has warned that its financial growth is heavily tied to its partnership with the UAE’s G42.

The company, which is based in California and generated $136.4 million in the first six months of this year, is preparing for a Nasdaq IPO under the ticker “CBRS”.

In its filing to the US Securities and Exchange Commission this week, Cerebras highlighted its reliance on AI and cloud computing giant G42, which contributed 87 percent of its earnings in the first half of 2024.

“A reduction in demand from, or a material adverse development in our relationship with, G42 or any of our other significant customers may harm our business, financial condition, results of operations, and prospects,” the company wrote.

G42, which is backed by Abu Dhabi’s sovereign wealth fund Mubadala, has been a key investor, acquiring a 1 percent stake in Cerebras through a $40 million investment in 2021. 

G42 has also made substantial prepayments and long-term purchase agreements valued at close to $1.5 billion for Cerebras to secure technology for its AI investment plans.

Cerebras, founded nine years ago, is known for its unconventional approach to AI technology, particularly in its use of wafers. A wafer is a thin, round slice of silicon used to make computer chips.

Instead of breaking the wafer into smaller chips as most companies do, Cerebras uses the whole wafer as one large chip. This allows it to handle more data and run AI processes faster, making it a potential challenger to Nvidia, which currently controls 95 percent of the market for AI chips.

Both the UAE and Saudi Arabia are big buyers of Nvidia chips.

Andrew Jackson, CEO of Inception, a G42 subsidiary that has developed an Arabic and English large language model (LLM), told AGBI last year that the company was “doubling down on Cerebras” after using its supercomputer Condor Galaxy 1 (CG1). 

“We are massive fans of Nvidia and we have been their largest customer in the region. But we’re also very open to trying new things,” he added.

State oil giant Saudi Aramco also plans to use Cerebras’ CS-3 chips to build LLMs.

This rivalry is playing out against the backdrop of US export restrictions. Nvidia’s sales to China and Russia have been curbed because of geopolitical concerns.

The Biden administration has also restricted some exports of advanced products to the Middle East to prevent onward sales to China. 

However, on Monday, the US Department of Commerce introduced rules that should ease restrictions on shipments of AI chips. Data centres in the Middle East will be able to apply for validated end user status, so they can obtain general authorisation instead of individual export licences.

Cerebras’ filing notes the potential risks of US export controls on its technology, emphasising that compliance with export licences is critical for its future sales.

Powering the future

AI technology is widely held to be critical to developing global influence and expanding high-growth industries.

The high-performance chips it uses – known as graphics processing units or GPUs – process large amounts of data much faster than traditional computer components.

The computer power these GPUs provide is critical to powering tools such as OpenAI’s ChatGPT, an LLM that has become a household name.

AI’s economic value in the GCC countries is projected to be as much as $150 billion, or approximately 9 percent of combined gross domestic product, according to a 2023 McKinsey report. 

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