OpenAI's $20B bet on Cerebras chips

OpenAI is pouring a massive amount of cash into the hardware race, and it is going beyond the usual GPU giants.

According to a report from The Information, OpenAI has agreed to spend more than $20 billion over the next three years to rent servers powered by Cerebras chips. As part of the arrangement, the ChatGPT maker will also receive equity warrants in the chip startup.

The commitment basically doubles a prior arrangement between the two companies. Back in January, OpenAI agreed to purchase up to 750 megawatts of computing capacity from Cerebras over three years in a deal valued at more than $10 billion.

Billions for compute and a piece of the company

The deal goes much deeper than standard server rentals.

OpenAI has also agreed to provide Cerebras roughly $1 billion to fund data center construction specifically designed to host its AI workloads. In total, OpenAI’s spending with the startup could reach $30 billion over the three-year window, which could translate into warrants representing up to a 10 percent stake in Cerebras as spending targets are met.

Cerebras could disclose details of the partnership as early as Friday, according to the report. Reuters noted that Cerebras declined to comment and OpenAI did not immediately respond.

The massive injection of capital comes at a pivotal moment for Cerebras. The Sunnyvale-based startup, founded in 2015 and known for its massive wafer-scale engine chips, is aiming for an IPO in the second quarter of this year. Last valued at $23.1 billion, it is also planning to raise $3 billion next month at a roughly $35 billion valuation. OpenAI CEO Sam Altman was already an early backer.

Why it matters

This deal highlights just how intense the battle for inference capacity has become. Running models to generate real-time answers is turning into the biggest compute bottleneck for frontier labs, and relying solely on Nvidia poses both supply and margin risks.

From OpenAI’s perspective, this looks like a calculated power move. By committing up to $30 billion, it locks down guaranteed capacity, diversifies away from standard accelerator supply chains, and secures an equity upside through warrants. If Cerebras thrives in the public markets, OpenAI effectively recoups a slice of its hardware bill.

For Cerebras, it is a double-edged sword. OpenAI’s massive business gives the startup the ultimate revenue validation heading into its second-quarter IPO, but tying its fortunes so closely to a single customer could leave public investors nervous about long-term customer concentration.