OpenAI at one point was considering acquiring Cerebras, an AI chip manufacturing company that’s about to go public, in response to recent legal filings.
Elon Musk's ongoing lawsuit against OpenAI incorporates recent evidence detailing how OpenAI considered acquiring Cerebras around 2017 – a 12 months after Cerebras was founded and just a couple of years after OpenAI went live.
In one e-mail Ilya Sutskever, certainly one of OpenAI's co-founders and former chief scientist, addressed OpenAI CEO Sam Altman and Musk and floated the thought of buying Cerebras through Tesla, Musk's EV company. At the time, Musk had a financial stake in OpenAI and had some influence over its direction.
“In the event that we determine to buy Cerebras, I strongly consider that it’ll be done through Tesla,” Sutskever wrote in September 2017. “But why should we do it this fashion once we too could do inside OpenAI? In particular, there may be concern that Tesla has an obligation to shareholders to maximise shareholder returns, which is inconsistent with OpenAI's mission. Therefore, the general end result for OpenAI will not be optimal.”
In a previous July 2017 email from Sutskever to Musk and OpenAI co-founder Greg Brockman (now the corporate's president), Sutskever mentions several agenda items related to Cerebras: “Negotiating merger terms with Cerebras” and “More due diligence with Cerebras.”
The merger agreement would ultimately fail, although the documents don’t make it clear why. And OpenAI would find yourself shelving its chip ambitions for years.
Cerebras, based in Sunnyvale, California, builds custom hardware for running and training AI models and claims its chips are faster and more efficient than Nvidia's flagship offerings for AI workloads.
After raising $715 million in enterprise capital, Cerebras is reportedly trying to roughly double its $4 billion valuation through the IPO. But it stands significant challenges. A single Abu Dhabi company, G42, accounted for 87% of Cerebras' revenue in the primary half of 2024, and U.S. lawmakers have expressed concern about G42's historical ties to China. Andrew Feldman, CEO of Cerebras, also has a checkered past. to have pleaded guilty to bypass accounting controls as vp of publicly traded Riverstone Networks.
If the acquisition had taken place, it could have benefited each corporations. Cerebras would have avoided the trail to a difficult IPO, while OpenAI may need had a very important resource within the race to construct its own chips.
OpenAI has long sought to cut back its dependence on Nvidia, which commands an enormous market share for AI-optimized chips. While OpenAI is late to the in-house chip game – Google and Amazon Web Services, amongst others, have long offered chips designed for AI workloads – the corporate is under pressure to cut back the prices of model training, tuning and execution. Owning your individual chips may very well be a method to get the savings you wish.
OpenAI once hoped to ascertain one Network of factories for chip manufacturing, and was given an acquisition goal. However, the corporate has reportedly abandoned these plans and as a substitute has been aggressively constructing a team of chip designers and engineers and dealing with semiconductor corporations Broadcom and TSMC to develop an AI chip for running models. It could arrive as early as 2026.
