The first AI chip startup to go public in 2025 will be Blaize
Nvidia's rise has reignited investor interest in artificial intelligence chip startups. One of them, Blaize, founded by a former Intel engineer, announced on Monday that it would list on Nasdaq in a SPAC transaction on Tuesday.
Launched in 2011, Blaize has raised $335 million from investors including Samsung and Mercedes-Benz. The company, headquartered in El Dorado Hills, California, focuses on making artificial intelligence chips for edge applications. Rather than being used primarily in large data centers like Nvidia's, its chips are designed to be integrated into smart products such as security cameras, drones and industrial robots.
“AI-driven edge computing is the future because of its low power consumption, low latency, cost-effectiveness and data privacy advantages,” said CEO Dinakar Munagala, who spent nearly 12 years at Intel said in a statement to TechCrunch.
According to its prospectus, Blaize is currently a small player in the vast artificial intelligence chip industry and very unprofitable, with revenue of only $3.8 million and losses of $87.5 million in 2023 (its latest financial data). However, chipmakers need significant capital to set up their manufacturing (Blaize says this is done in the U.S.) before they can really start scaling up.
“As you can imagine, (as a) chip company, you make a lot of investments and when the hockey stick comes, it climbs,” Munagala told TechCrunch.
Blaize also claims a $400 million deal is in the works. A deal on its investor platform facilitated a purchase order of up to $104 million with an unnamed European, Middle Eastern and African “defense entity” – possibly based in the Middle East – that could identify unknown or friendly forces, Spotting boats and detection drones. (Munagala declined to name the specific country.)
Munagala told TechCrunch he expects Blaize to be worth $1.2 billion following the SPAC merger. That's lower than the private valuations of other companies such as Cerebras, a closely watched artificial intelligence chip maker that filed for an IPO last fall and is seeking to double its $4 billion valuation, TechCrunch previously reported. However, Cerebras has yet to go public because some investors are concerned about its overreliance on a single Middle Eastern customer, investors told CNBC.
However, unlike Blaize, Cerebras focuses on data center chips. Blaize's launch is ultimately a bet on a future where AI chips move away from centralized data centers and become more integrated into physical products.
“All the AI hype is happening in the data center. What's interesting is that they completely ignore and forget about real physical world use cases that are very real, are impacting people's lives, and are happening and making money,” Munagala told TechCrunch. “We focus on practical applications of artificial intelligence in the real world.”
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