Nvidia Faces New Competition: Cerebras Files for IPO, Huawei Pushes AI Chips

Accelerated computing and artificial intelligence stock Nvidia Corp NVDA has been up over 171% in the last 12 months.

However, Gil Luria of DA Davidson flagged Nvidia’s dependence on four customers, which could include hyperscalars Microsoft Corp MSFT, Meta Platforms Inc META, Amazon.Com Inc AMZN, and Google parent Alphabet Inc GOOG GOOGL considering in-house chip developments by the tech giants.

Analysts had also highlighted the AI frenzy as overhyped, raising questions over the sustainability of the colossal investment further intensified by Nvidia’s delays in product releases like its Blackwell GPUs.

Also Read: AMD Chief Predicts Custom Chips Will Outperform GPUs, Sees Shift in AI Chip Demand: Report

The AI wave is prompting several companies to tap the growth by catering to industries ranging from gaming to professional visualization, data centers, and automotive.

On Monday, Cerebras Systems Inc filed for an initial public offering with the SEC. CS-3, Cerebras’ flagship system, can handle AI computing workloads and power AI supercomputers. It proposes to compete with Nvidia.

The AI computing firm’s sales reached $136.4 million in the first six months of 2024, up from $8.7 million a year ago. Cerebras filed confidentially for the IPO in August, Bloomberg reports.

Cerebras reported a net loss of $66.6 million, down from $77.8 million a year ago. Group 42 Holding accounted for 87% of its revenue for the first half of 2024. 

According to a Bloomberg report, Cerebras could raise up to $1 billion at a valuation of $7 billion to $8 billion.

In China, Huawei Technologies is offering Ascend 910C processor samples to Chinese hyperscalars, which are Nvidia customers, SCMP reports.

China pushed its companies to reach out to domestic AI chips from companies like Cambricon Technologies Corp and Huawei Technologies Co as it retaliates against the US’s advanced semiconductor tech sanctions.

Price Action: NVDA stock is down 1.19% at $120.01 at the last check on Tuesday.

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