● Covered by 1 source · 1 reportMedium impact1 negative
Cerebras stock falls 20% after report of Nvidia powering OpenAI's GPT-6.1 Sol
Key points
- Cerebras stock fell 20% this week to a post-IPO low.
- Report stated OpenAI's GPT-6.1 Sol will use Nvidia GPUs for "Ultrafast" mode.
- Insider share lockup expiration also pressured the stock.
- OpenAI CEO Sam Altman affirmed Cerebras as a "close partner" after the drop.
Stock Decline and Nvidia Competition
Cerebras stock experienced a nearly 20% decline this week, hitting its lowest point since its May IPO. This downturn was primarily driven by a report from SemiAnalysis suggesting that OpenAI will utilize Nvidia graphics processing units (GPUs) for the "Ultrafast" mode of its GPT-6.1 Sol model, rather than Cerebras hardware. This development is significant as Cerebras had previously secured a deal with OpenAI to supply computing power.
Market Cap and Investor Expectations
Cerebras' market capitalization has fallen to just over $39 billion, a substantial drop from its $95 billion valuation on its first day of trading. Investors initially showed enthusiasm for Cerebras as a potential alternative to Nvidia in the AI chip market, particularly for inference workloads. The company manufactures custom ASICs and offers them as a cloud service.
Lockup Expiration and Insider Sales
Further pressure on Cerebras' stock came from the expiration of post-IPO restrictions on insider shares. This week, up to 19.4 million shares, representing 8% of total outstanding shares, held by directors, officers, and employees became unlocked. Previously, 14.6 million shares had been unlocking every two weeks since August 19. CEO Andrew Feldman and CTO Sean Lie sold over $240 million in Class A shares between August 20 and September 25.
OpenAI's Response
Following the stock drop, OpenAI CEO Sam Altman addressed the "speculation about our partnership with Cerebras" on X. Altman stated, "Cerebras is a close partner, and we have a deep engagement pushing on the frontiers of speed." This statement led to a nearly 3% rise in Cerebras' stock during extended trading on Friday.
Inference Market Significance
The report regarding OpenAI's use of Nvidia for inference workloads is notable because inference is projected to become the dominant workload in AI data centers by the end of the decade, according to McKinsey. Cerebras' deal with OpenAI, valued at over $10 billion through 2028, was intended to supply 750 megawatts of computing power, much of which would be for inference.
✨ This summary was generated by AI from the outlets' reporting listed below. It is not independently verified and may contain errors — check the original sources. How BrevFeed works →
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Reporting from
Cerebras stock dropped nearly 20% this week, reaching a post-IPO low, following a report that OpenAI's "Ultrafast" mode for GPT-6.1 Sol will use Nvidia GPUs instead of Cerebras hardware. This news, coupled with the expiration of insider share lockup periods, contributed to the decline, despite OpenAI CEO Sam Altman's statement affirming Cerebras as a close partner.