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Welcome back to Bloomberg Tech to our TV viewers and radio listeners around the world. Were joined by Andrew Feldman Cerebres CEO Srebrest Priceless IPO. Andrew one hundred and eighty five dollars a share above the top end of the marketing range. I'm looking at the Bloomberg terminal shares indicated to open three hundred and fifty dollars a share. Your reaction to that.
Pretty good day? Huh?
How you feel? I mean, did you see this coming? There's some mechanics to it, right, But you know, I know you, I know you like to let's be honest, you like to talk about what's happening in AI. The big focus on inference Cerebress is placing it. But this is the biggest IPO of the year so far. You know, what does it mean to you and your employee in your back.
Is it's the biggest tech one of the biggest tech IPOs in history, and it's the biggest semi IPO in history. We couldn't be more proud. This is the combination of a decade, a work of countless late nights and long weekends. We are enormously proud and excited and ready to get back to work and start working on the on the next great thing.
Again. The market is indicating shares to open at three hundred and fifty dollars a share. Let's see where we're at when trading starts. But you're being priced in as a major player in this field. Now, what evidence would you point to that you are in fact a major payer. A lot of focus is on the concentration in the relationship with open Ai. Tell me about some of the other frontier labs or other names that you have some concrete talks with.
Sure, in the last four months, we announced a deal with open ai that's north of twenty billion dollars for seven hundred and fifty megawatts of compute. We also announced a major engagement with AWS where our equipment would be deployed in their data centers. I think those are obviously the largest, but there are dozens of others that are in what used to be a big deal in the ten to fifty million dollar category, and so there's just
an extraordinary demand right now for fast inference. We're the fastest, not by a little bit, but by more than an order of magnitude. You know, we're fifteen times faster than the next nearest competitor, and as AI has become useful, everybody wants it to be fast. Nobody wants to wait.
On that, you know, twenty one x on you know performance and also like a lot of emphasis on the dollar PA token, right that that is the metric that the field cares about. But that's on paper. You know, you just talked about the AWS relationship as an engagement. When does the word engagement end and real revenues start to show up for you from those relationships.
Sure, we signed a binding term sheet with AWS as described in RS one, and we're working through the master agreement. I think in dealing with organizations of that size, it takes a little time to dot all the eyes across the t's, but we are extremely confident that they will be an enormous channel for us and a partner in delivering our technology to large enterprises and medium sized enterprises
around the world. I think they are one of the preferred cloud providers for just about every enterprise on Earth, and so an opportunity to have your solution embedded in their offering as part of their bedrock offering. That's a huge win for us.
We're live on Bloomberg Television and Radio. This is a Bloomberg Tech takeover, and we're speaking to Andrew Feldman, the CEO of Cerebrus, whose company just priced the IPO at one hundred and eighty five dollars a share and is indicated right now, I'm looking on the Bloomberg terminal maybe to start trade at three hundred and fifty dollars a share. Andrew, I think you know this about me. Whenever we have a big moment to have a conversation like this, I
always go to the Bloomberg Tech audience. What do they want to know? And actually the first question is what was your attitude toward retail investors? Why did you not do more for the retail investor in this big moment for your company?
We were more than twenty five xover subscribed. There was a lot of hard decisions that needed to be made, and nobody got what they wanted. And you know, we did our best. It's about all you can do. When there's twenty five times more demand for your stock at the institutional level and at the retail level, then there are shares to be sold. So we're really proud of the way we chose to do it. We thought we did it with integrity, and I think we are very comfortable with the ending allocation.
Full stack, fully vertically integrated. And what I mean by that is you literally build the supercomputer top to tail, right, so in Video will do the tray, not just GPU, but then Dell super Micro will assemble it. Dell's margins low teens, in Video's margins mid seventies, Your margins forty forty one percent. And what I'm trying to help the audience understand is why that strategy of owning everything top to sail is going to pay off in the long run.
And I would say that The other question I get for you is what's the future outlook for margins based on your plans?
Well, I think a couple of things. I think we have obviously opportunities to improve our cost structure. You know, we did half a billion last year in sales. That means we put two hundred and fifty million in the supply chain. Obviously that's not an efficient spot. As we grow, we will have more leverage in the supply chain and our cost of goods will come down. I think we
have an opportunity to increase prices. I think the demand for fast inference is overwhelming this minute, and so I think in the in the long run, we'll be really proud of our of our gross margins and where they will sort of wash out as we hit scale.
I've got a question for you from a from a terminal client via IV. Thank you for the question. Everyone's tuned in right now, Andrew. They want they want, they want the detail. And so one way that people look at it is that you know, this is custom silicon, but Cerebrius isn't. Isn't a chip per se. It's like wafer level, right. Is there a reason why you can't just sell that versus the whole server? Yeah?
Yeah, that's a good question. For the entire seventy year history of the computer industry, every previous effort had failed to build a chip of the size. So for your audience, this chip is the size of a dinner plate, while traditional chips are the size of a postage stamping. And not only had everybody failed until we succeeded, but several tried to copy us and have since failed as well.
Part of what we were capable of doing and able to do was that we were able to use not just the chip, but also our expertise in packaging and in system design to solve some of the problems and build a truly compelling solution. Right, you don't just get fifteen or eighteen or twenty times faster than the competition because you built a good chip. That's one of a collection of different things that enable that sort of performance.
You can build a great chip, and the system vendor, the ODM, can nibble away at your performance by not delivering the right amount of power or the right amount of IO. Right. Right, there's there's a reason why in Video then sought to control the IO the Envy link because they didn't want others to nibble away at their performance. And so by building the system, we were able to optimize all parts. I mean, you could ask the same thing about Porscho. You know, why don't you sell just engines? Right?
And it turns out that that's a nine to eleven is a is a beautiful car because of the engine and everything else they put in it.
Andrew the team's telling me we've got to go, But I got to ask you five point five billion dollars, what do you use the proceeds for and actually, how flexible can you now be an allocating capacity to new customers. We just have thirty seconds.
Oh, I think we will use it to increase capacity. We are excited to bring many new customers on board. There's a tremendous demand for what we're doing. I think we can be aggressive on that front.
Andrew Feldman Cerebras CEO pricing the IPO one eighty five indicated to open three hundred and fifty dollars a share. Thank you for your time,