Cerebras Hit $60B—After Burning $200M on a Problem Nobody Thought Solvable
Cerebras hit $60B after its IPO, but nearly died in 2019 burning $8M monthly on a packaging problem the semiconductor industry had failed to solve for decades.
In Brief
- Cerebras ended its first week as a public company worth roughly $60 billion after a blockbuster Thursday IPO
- In 2019, the startup was burning $8 million a month trying to solve a wafer-scale chip packaging problem no one in semiconductors had ever cracked
- OpenAI loaned Cerebras $1 billion secured by warrants now worth over $9 billion—and locked in a temporary exclusivity deal
The AI chipmaker that just closed its first trading week at a roughly $60 billion valuation once came within months of collapse. TechCrunch reports that Cerebras was incinerating about $8 million a month in 2019, having burned through nearly $200 million on a single technical problem that the entire semiconductor industry had deemed impossible for decades: packaging a wafer-scale chip.
CEO Andrew Feldman described the ordeal as a painful cycle of board meetings and failed prototypes. Cerebras’ chips were 58 times larger than conventional processors and consumed 40 times more power—there were no premade heat sinks, no vendors, no manufacturing partners. The team had to invent a machine that could simultaneously bolt 40 screws to secure the wafer to a board without cracking it. In July 2019, the packaged chip finally booted. Feldman called it “one of the greatest moments of my life”—notable given the same founding team had previously sold SeaMicro to AMD for $334 million.
The OpenAI Triangle
The IPO also surfaced details of Cerebras’ entanglement with its biggest customer. CNBC reported that OpenAI signed a deal worth over $20 billion for 750 megawatts of compute through 2028. On top of that, OpenAI loaned Cerebras $1 billion secured by warrants for roughly 33 million shares—worth more than $9 billion at Friday’s closing price of $279. As Frontierbeat previously reported, that deal also includes a temporary restriction barring Cerebras from selling to certain OpenAI competitors. Feldman would not confirm the competitor is Anthropic, but said the restriction is “limited in time” and designed to ensure capacity for OpenAI.
The structure echoes patterns across AI infrastructure—Nvidia’s own investment deals have drawn similar vendor-financing comparisons. Cerebras just has a far more dramatic origin story.
FAQ
What was the packaging problem Cerebras had to solve?
Everything after manufacturing the silicon: adhering the giant wafer to a motherboard, delivering power, managing cooling, and routing data—none of which had been done at that scale before.
How much is OpenAI’s Cerebras stake worth?
OpenAI’s warrants cover about 33 million shares. At the Friday closing price of $279, that stake is worth over $9 billion.
Can Cerebras sell to Anthropic?
Not currently, based on a temporary exclusivity restriction in the OpenAI loan deal. Feldman says the restriction is time-limited and exists to ensure Cerebras can meet OpenAI’s capacity needs first.
