Abu Dhabi-backed AI chipmaker Cerebras raises $1bn

• Cerebras valued at $23bn
• Abu Dhabi’s G42 owns 1%
• Gulf gaining access to US chips

US artificial intelligence chipmaker Cerebras Systems, in which Abu Dhabi’s G42 owns a stake, said it has raised $1 billion in a funding round as investors continue to pour money into the technology needed to train and run AI models.

The financing highlights the challenge of taking on Nvidia, the $3 trillion company that controls about 95 percent of the AI semiconductor market. Nvidia remains the default choice for developers worldwide, including in the UAE and Saudi Arabia.

The late-stage funding was led by US investment firm Tiger Global. Other investors included Benchmark, Fidelity Management & Research Company, Atreides Management, Alpha Wave Global, Altimeter, AMD, Coatue and 1789 Capital, Cerebras said in a press statement on Tuesday.

The latest round values Cerebras at about $23 billion, nearly triple its market capitalisation from its previous financing four months ago.

This raise is its second billion-dollar round since September, when it announced a $1.1 billion Series G that valued it at $8.1 billion, after which it filed to withdraw its US initial public offering.

Cerebras is trying to broaden its customer base and keep a future US listing on track after its IPO process drew scrutiny over its reliance on Abu Dhabi-backed technology group G42. It owns about 1 percent of Cerebras and has around $1.4 billion in long-term purchase commitments, according to earlier reporting and company disclosures.

Cerebras’s partnership with G42 accounted for 87 percent of its revenue in the first half of 2024, a concentration that raised investor and regulatory questions during the IPO run-up, even as the company has sought to diversify into “hundreds of customers worldwide”, including Saudi Aramco, CEO Andrew Feldman has said.

The California-based company makes “wafer-scale” processors – chips built on an entire silicon wafer rather than cut into smaller pieces – a design it says can accelerate AI training and inference by keeping more data on a single processor. The technology remains less proven at a broad commercial scale than Nvidia’s dominant graphics processing unit approach.

Andrew Jackson, CEO of Inception, a subsidiary of G42 that has developed an Arabic and English large language model, told AGBI in 2023 that the company was “doubling down on Cerebras”.

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The backdrop for Gulf access to US AI chips is shifting. Feldman said last year that Cerebras chips face the same US export rules as Nvidia, and that the company struggles to supply the region despite the UAE being a “great ally”.

Washington tightened controls in 2023, restricting sales of advanced AI processors amid concerns about possible Chinese back-door access to sensitive technology.

More recently, the US has begun granting tightly conditioned approvals for exports of Nvidia chips to the UAE and Humain in Saudi Arabia.

Feldman said some shipments had been cleared but only under strict conditions, including requirements that they be managed by US hyperscalers, underscoring how US policy is steering where the most powerful chips can be deployed and by whom.