Cerebras Systems, a leading artificial intelligence (AI) hardware developer, is yet again stalled in its much-anticipated initial public offering (IPO). The delay primarily due to a national security review by the United States Committee on Foreign Investment in the United States (CFIUS). It is a review linked with a significant investment by UAE-based technology conglomerate G42, which has expressed its intention to purchase $335 million worth of Cerebras’ shares. If approved, this investment would give G42 control of over 5% of the company.
Cerebras is a head-to-head competitor to industry leader Nvidia in the AI chip market, with innovative solutions for building enormous AI models and running AI applications. The company’s technology has been used to train an Arabic large language model that is now available on the Microsoft Azure AI platform. Despite its technological advances, Cerebras’ plans for an IPO have been complicated by G42’s previous associations with China, which have raised concern among U.S. security officials. G42 has worked with sanctioned Chinese companies like Huawei and BGI Group, which has raised fears of indirect access to advanced U.S. AI technology.
The CFIUS process has been slowed, partially due to the slowdown in making fundamental White House appointments. Cerebras executives had hoped the Trump administration would accelerate the national security review, but those aspirations were crushed. The slowdown is symptomatic of the challenges for foreign investor-backed firms, particularly where such foreign investors are in nations under U.S. sanctions.
Cerebras filed its IPO papers in October 2024 but is still waiting for clearance from CFIUS. The company’s valuation has nearly doubled after G42 agreed to its investment and was estimated at about $8 billion. However, the uncertainty related to G42’s shareholding has held back Cerebras to proceed with its public float. Investors prefer to hear about such a large investment prior to participating in an IPO.
The ongoing review further points to broader geopolitics and the increasingly sensitive stance of the U.S. government against foreign investments, most notably those involving technology that could be traced to China. Cerebras and G42 attempted to respond through the amendment of their filing including the condition that the shares being bought by G42 are non-voting shares, claiming that they are exempt from CFIUS review. The review continues to be ongoing despite these steps.
Cerebras’ case points out the complexities and risks of delving into U.S. national security regulations by companies with international investors. Aside from damaging its ambitions, the delay in its IPO also inflicts pain on Cerebras’ plans but more so to technology companies as a whole for attempting to list amidst geopolitical uncertainty.
