OpenAI’s 2017 Bid for Cerebras: A Strategic Move in AI Chip Development

OpenAI Considered Acquiring AI Chipmaker Cerebras in 2017, Legal Filings Reveal

In a surprising revelation from legal documents related to Elon Musk’s lawsuit against OpenAI, it has come to light that the artificial intelligence research company contemplated acquiring Cerebras, a prominent AI chipmaking firm, back in 2017.

The potential acquisition was proposed by OpenAI co-founder Ilya Sutskever, who suggested pursuing the deal through Tesla. This proposition raised questions about potential conflicts with Tesla’s shareholder responsibilities.

Internal communications between Sutskever, Musk, and Greg Brockman detailed discussions about negotiating merger terms and conducting due diligence with Cerebras. However, the merger did not come to fruition, and OpenAI subsequently paused its chip development ambitions.

Cerebras, known for its custom hardware designed for AI models, has positioned itself as a formidable competitor to industry giant Nvidia. The company has successfully raised $715 million in funding and is reportedly aiming to double its $4 billion valuation through an initial public offering (IPO).

Despite its achievements, Cerebras faces significant challenges. The company’s heavy reliance on a single client, G42, for 87% of its revenue, coupled with concerns over G42’s alleged ties to China, has raised eyebrows in the industry. Additionally, CEO Andrew Feldman’s past legal issues have added to the company’s hurdles.

Had the acquisition materialized, it could have provided Cerebras with a more stable trajectory than pursuing an IPO, while simultaneously offering OpenAI a strategic resource in the competitive AI chip market.

OpenAI’s interest in chip development stems from its desire to reduce dependency on Nvidia. Initially, the company considered establishing its chip manufacturing facilities. However, OpenAI has since shifted its strategy, focusing on building a team of chip designers and collaborating with industry leaders such as Broadcom and TSMC.

Reports suggest that OpenAI aims to have its new AI chip available by 2026, with the primary goal of lowering operational costs for AI model development and deployment.

As the AI industry continues to evolve rapidly, the revelation of OpenAI’s past interest in Cerebras sheds light on the complex strategies and considerations at play in the race for AI supremacy.