Blaize will be the first artificial intelligence chip startup to go public in 2025.
Blaize, a company that manufactures artificial intelligence chips and was founded by former Intel engineers, is scheduled to go public on NASDAQ on January 14.
The growth of Nvidia has sparked renewed interest among investors in startups dedicated to artificial intelligence chips. One such company is Blaize, founded by former Intel engineers, which has announced its intention to go public on Nasdaq through a SPAC merger next Tuesday. Since its inception in 2011, Blaize has raised $335 million from investors such as Samsung and Mercedes-Benz. The company, headquartered in El Dorado Hills, California, specializes in manufacturing AI chips for edge applications, unlike Nvidia's chips, which are designed for large data centers.
Blaize's chips are intended to be integrated into smart products, such as security cameras, drones, and industrial robots. According to CEO Dinakar Munagala, who worked at Intel for nearly 12 years, “edge computing driven by AI is the future, thanks to its low energy consumption, low latency, cost-effectiveness, and advantages in data privacy.”
Despite being a small player in the vast AI chip industry, Blaize faces significant financial challenges, reporting losses of $87.5 million with only $3.8 million in revenue in 2023, the most recent year for which information is available. However, Munagala points out that chip manufacturing requires substantial capital investment, especially in the United States, before it can really scale. The company is also working on contracts totaling $400 million, including a purchase order of up to $104 million with a defense entity in the EMEA region, intended for troop identification systems.
Munagala estimates that Blaize's value could reach $1.2 billion following its merger with the SPAC, a figure lower than the private valuations of companies like Cerebras, a well-known AI chip manufacturer that sought to double its $4 billion valuation in its attempt to go public. However, Cerebras is facing some investor reservations due to its reliance on a single customer in the Middle East.
Blaize's public offering represents a bet on a future where AI chips become increasingly integrated into physical products, rather than remaining in data centers. Munagala emphasizes that while all the excitement around artificial intelligence has focused on data centers, practical real-world applications that are already impacting people’s lives and generating revenue have been overlooked.
