OpenAI announced on Wednesday that it will purchase up to 750 megawatts of computing power from chipmaker Cerebras over the next three years. The ChatGPT maker aims to enhance its position in the AI race and address rising demand, according to statements from both companies.
A source familiar with the matter said the contract is worth more than $10 billion over its lifetime. OpenAI plans to use systems built by Cerebras to power its popular chatbot, marking another multi-billion-dollar agreement for the AI firm.
Cerebras Chief Executive Andrew Feldman noted that discussions began last August after Cerebras demonstrated that OpenAI’s open-source models could run more efficiently on its chips than on traditional GPUs. Following months of negotiations, the companies reached a deal where Cerebras will sell cloud services powered by its chips to OpenAI, focusing on inference and reasoning models that require time to “think” before generating responses.
Under the agreement, Cerebras will build or lease data centers filled with its chips, while OpenAI will pay to use Cerebras’ cloud services for running inference on its AI products. The capacity is scheduled to come online in multiple tranches through 2028.
“Integrating Cerebras into our mix of compute solutions is all about making our AI respond much faster,” OpenAI said in a post on its website.
The partnership is seen as crucial for Cerebras’ latest push toward going public, helping it diversify revenue away from UAE-based tech firm G42, which has been both an investor and a major customer. Cerebras, founded in 2015, is known for its wafer-scale engines designed to accelerate training and inference for large AI models, competing with offerings from Nvidia and other chipmakers. Sam Altman, CEO of OpenAI, is an early investor in Cerebras.
Reuters reported last month that Cerebras is preparing to file for an initial public offering, targeting a listing in the second quarter of this year. This represents the company’s second attempt at the public market, after it first filed paperwork for an IPO in 2024, postponed, and ultimately withdrew in October.
OpenAI is also laying groundwork for its own IPO that could value it at up to $1 trillion, according to previous Reuters reporting. CEO Sam Altman stated last year that OpenAI is committed to spending $1.4 trillion to develop 30 gigawatts of computing resources, enough to power roughly 25 million U.S. homes.
As companies invest heavily in the booming technology and valuations climb, investors and experts have expressed concerns that the industry might be turning into a bubble reminiscent of the dotcom boom and bust.