Cerebras stock slumped nearly 20% this week to its lowest level since the company’s May debut, following reports that Nvidia will power a key OpenAI feature and as post-IPO share lockups expired.
Research firm SemiAnalysis posted on X that OpenAI plans to run the “Ultrafast” mode for GPT-6.1 Sol on Nvidia graphics processing units rather than Cerebras hardware. The slide leaves Cerebras shares more than 50% below their initial surge after the Nasdaq listing.
The stock closed Friday at $166.43. Selling pressure also mounted as certain insider share restrictions expired this week, adding to supply.
After the close, shares gained almost 3% in extended trading when OpenAI CEO Sam Altman addressed “speculation about our partnership with Cerebras,” writing on X that “Cerebras is a close partner, and we have a deep engagement pushing on the frontiers of speed.”
Cerebras stock under pressure from Nvidia competition
The downturn caps a rough stretch for the AI chip startup, which ended its first trading day with a market value of $95 billion, just shy of companies like Meta, Alibaba and SpaceX that opened above $100 billion. Cerebras’ market cap now sits just over $39 billion.
Investors had bet on Cerebras as an alternative to Nvidia for AI compute. The company builds dinner plate-sized ASICs tailored for inference workloads and leases capacity from its own data centers as a cloud service.
In January, Cerebras announced a deal with OpenAI valued at more than $10 billion to supply 750 megawatts of compute through 2028.
Reports that OpenAI inference is shifting to Nvidia dampened that optimism. Consulting firm McKinsey projects inference will overtake training as the dominant workload in AI data centers by the end of the decade.
Lockup expirations add to selling
More shares are also hitting the market as time passes from the IPO. According to the company’s prospectus, up to 19.4 million shares held by directors, officers, non-executive employees and other holders unlocked on Wednesday, equal to about 8% of shares outstanding.
Before that, up to 14.6 million shares had been unlocking for sale every two weeks since Aug. 19.
CEO Andrew Feldman and CTO Sean Lie, who became billionaires through the IPO, sold more than $240 million in Class A shares between Aug. 20 and Sept. 25 under prearranged trading plans. Other executives have also sold shares worth millions, as investors weigh how powerful stock breakout stories can shift once early shareholders begin to cash out.
