NEW FILING REVEALS OPENAI MULLED BUYING CEREBRAS, AN AI CHIPMAKER THAT IS GOING PUBLIC
 OPENAI was considering acquiring Cerebras, an artificial intelligence chipmaker that is gearing for an initial public offering, according to a new legal filing.

Elon Musk is included in a new exhibit of how OpenAI was still mulling on taking over Cerebras in or around 2017 — a year after Cerebras' inception, and just several years after OpenAI started running its operation.

One of OpenAI's co-founders and former chief scientist, Ilya Sutskever, floated the idea of buying Cerebras through Tesla, Musk's EV company, in an email to OpenAI CEO Sam Altman and Musk. At the time, Musk was financially involved in OpenAI and exerted some influence over its direction.

"In the event we decide to buy Cerebras, my strong sense is that it'll be done through Tesla," Sutskever wrote in September 2017. "But why do it this way if we could also do it from within OpenAI? Specifically, the concern is that Tesla has a duty to shareholders to maximize shareholder return, which is not aligned with OpenAI's mission. So the overall result may not end up being optimal for OpenAI."

In an e-mail dated July 2017 early in this very e-mail thread to Musk and OpenAI co-founder Greg Brockman-now the company's president-Sutskever mentions a number of Cerebras-related agenda items: "Negotiate merger terms with Cerebras" and "More due diligence with Cerebras."

The merger deal would ultimately fall through, although it's not clear from the exhibits why. And OpenAI would end up shelving its chip ambitions for years.

The California company, Cerebras of Sunnyvale, designs and builds custom hardware to run and train AI models and says its chips are faster and more efficient than Nvidia's top-of-the-line offerings for AI workloads.

Having raised $715 million in venture capital, Cerebras is said to be looking to more than double its $4 billion valuation through the IPO. But the task will not be easy. The Abu Dhabi company G42 accounted for 87% of the first half of 2024 revenue for Cerebras. No surprise then that US lawmakers are spooked about G42′s checkered past with China. Checkered past: Cerebras CEO Andrew Feldman pleaded guilty to accounting controls evasion when he was VP at public company Riverstone Networks.

It could have gone both ways, and it would have benefited both companies. Cerebras would've taken away the path to an expensive IPO and not had to venture into a tricky space of doing one. For OpenAI, it would have been an essential resource in its race to begin building chips in-house.

Now, the firm is squeezed to reduce costs of model training, fine-tuning, and running. One way to achieve that would be to develop its own chips OpenAI has sought for a long time to reduce its reliance on Nvidia, which commands a massive share of the market for AI-optimized chips. End.

OpenAI at one point had a goal to set up a network of factories for chip manufacturing and was considering an acquisition target. But it's said to have abandoned those plans in favor of aggressively building out a team of chip designers and engineers, working with semiconductor firms Broadcom and TSMC to create an AI chip for running models. It could arrive as soon as 2026.