The first AI chip startup to go public in 2025 will be Blaize

The rise of NVIDIA has spurred renewed investor interest in AI chip startups. One of them, Blaize, founded by former Intel engineers, will go public on the NASDAQ in a SPAC deal on Tuesday, he announced on Monday.

Launched in 2011, Blaize has raised $335 million from investors such as Samsung and Mercedes-Benz. Headquartered in El Dorado Hills, California, it focuses on manufacturing AI chips for cutting-edge applications. Rather than being used in vast data centers (like NVIDIA), their chips are intended to be integrated into smart products such as security cameras, drones and industrial robots.

“AI-powered edge computing is the future because of its low power consumption, low latency, cost-effectiveness and data privacy advantages,” CEO Dinakar Munagala, who previously worked for nearly 12 years at Intel , he said in a statement to TechCrunch.

Blaize is currently a small player in the mammoth AI chip industry and is very unprofitable, losing $87.5 million with only $3.8 million in revenue in 2023, the latest year available for its financials, according to it. to its prospectus. However, chip makers need loads of capital to build their manufacturing (which Blaize says is done in the US) before they can really start to scale.

“As you can imagine, (as a) chip company you make a massive amount of investment and when the hockey stick comes, it goes up,” Munagala told TechCrunch.

Blaize also sells $400 million in deals in the pipeline. An agreement in its investor deck promotes a signed purchase order of up to $104 million with an unnamed EMEA “defense entity,” likely in the Middle East, for a system that can identify unknown or friendly troops, spot boats small, and detect drones. (Munagala declined to say exactly which country.)

Munagala told TechCrunch that he expects Blaize to be worth $1.2 billion after its SPAC merger. That’s lower than private valuations for other companies like Cerebras, a closely watched AI chipmaker that filed for an IPO last fall and was looking to double its $4 billion valuationTechCrunch first reported it. However, Cerebras has yet to go public, as some investors have expressed dismay over its over-reliance on a single Middle Eastern client. investors told CNBC.

In contrast to Blaize, however, Cerebras focuses on data center chips. Blaize the public is ultimately a bet on a future where AI chips move from those centralized data centers to be more integrated into physical products.

“All the AI ​​hype is happening in the data center. Interestingly, they have completely overlooked and forgotten about the real physical world use cases that are very real, that touch people’s lives and that are happening right now and making money Munagala told TechCrunch. “We are focused on the practical use of AI in the physical world.”