Cerebras Systems, a leading AI chipmaker competing with Nvidia (Nasdaq: NVDA), is likely to delay its highly anticipated initial public offering due to an ongoing US national security review, according to an exclusive report from Reuters.
The review, conducted by the Committee on Foreign Investment in the United States (CFIUS), is focusing on a minority investment made by UAE-based tech conglomerate G42 in Cerebras.
The company was initially planning to begin its IPO roadshow early next week, but sources familiar with the matter indicate that these plans are now on hold. Cerebras is expected to postpone its stock market launch until it receives clearance from CFIUS, which the company anticipates will happen later this year.
G42, both an investor and Cerebras’ largest client, has come under increased scrutiny from Washington policymakers. There are concerns that Middle Eastern companies like G42 could potentially serve as intermediaries for China to access advanced American AI technology, which it is currently prohibited from obtaining directly.
The significance of G42’s relationship with Cerebras is evident in the company’s financial disclosures. In 2023, G42 accounted for 83% of Cerebras’ total revenue, contributing $65.1 million. For the first half of 2024, Cerebras reported a substantial increase in total revenue, reaching $136.4 million compared to $8.7 million in the same period the previous year.
Cerebras and G42 have jointly filed a notification with CFIUS regarding the investment. They later amended the filing, specifying that G42’s shares would be non-voting securities, arguing that this should exempt the deal from CFIUS review. The companies subsequently requested to withdraw the notice, which CFIUS is currently considering.
Based in Sunnyvale, California, Cerebras was valued at approximately $4 billion in a 2021 funding round. The company is known for its innovative approach to AI chip design, claiming technical advantages over competitors like Nvidia in AI applications. Cerebras is currently working on building AI data centers for G42 and has developed technology used in training an Arabic large language model.
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