Nvidia’s rise has sparked renewed investor interest in AI chip startups. One of them, Blaize, founded by former Intel engineers, is set to go public on the Nasdaq in a SPAC deal on Tuesday, it announced Monday.
Started in 2011, Blaze has raised $335 million from investors including Samsung and Mercedes-Benz. Based in El Dorado Hills, California, it focuses on manufacturing AI chips for cutting-edge applications. Rather than being used primarily in massive data centers (like Nvidia’s), its chips are intended to be incorporated into smart products like security cameras, drones and industrial robots.
“Artificial intelligence edge computing is the future due to its low power consumption, low latency, cost efficiency and data privacy benefits,” said CEO Dinakar Munagala, who previously worked for Intel for nearly 12 years, in statement to TechCrunch.
Blaize is currently a small player in the mammoth AI chip industry and is extremely unprofitable, losing $87.5 million on revenue of just $3.8 million in 2023, the most recent year available for its financials, according to with in his newsletter. However, chip makers require a lot of capital to develop their manufacturing (which Blaize says is done in the US) before they can really start scaling.
“As you can imagine, [as a] chip company you make a huge amount of investment and when the hockey stick comes, it climbs,” Munagala told TechCrunch.
Blaze also projects $400 million in deals in the works. An investor deck deal advances 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 detect unknown or friendly troops, locate small vessels 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 artificial intelligence chipmaker that filed for an IPO last fall and was trying to double its valuation to $4 billion, TechCrunch previously reported. However, Cerebras has yet to go public as some investors have had concerns about its over-reliance on a single Middle Eastern customer, investors told CNBC.
Unlike Blaize, however, Cerebras focuses on data center chips. Blaize’s post is ultimately a bet on a future where AI chips move out of these centralized data centers to become more embedded in physical products.
“All the AI hype is happening in the data center. It’s interesting that they’ve completely neglected and forgotten real-world use cases that are very real, that touch people’s lives and are happening now and making money,” Munagala told TechCrunch. “We focus on the practical use of artificial intelligence in the natural world.”
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