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

Nvidia’s rise has spurred renewed investor interest in AI chip startups. Blaize, founded by former Intel engineers, is one of them, and is set to go public on the Nasdaq in a SPAC deal on Tuesday, it announced Monday.

It was launched in 2011, Belize It raised $335 million from investors such as Samsung and Mercedes-Benz. Headquartered in El Dorado Hills, California, it focuses on manufacturing AI chips for edge applications. Instead of being used mostly in massive data centers (like Nvidia), its chips are supposed to be integrated into smart products like security cameras, drones, and industrial robots.

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

Blaize is currently a small player in the massive AI chip industry and is largely unprofitable, losing $87.5 million on revenue of just $3.8 million in 2023, the most recent year for its financial data available, according to to its prospectus. However, chip manufacturers need a significant amount of capital to build out their manufacturing operations (which Blaze says are done in the US) before they can really start expanding.

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

Belize also touts $400 million worth of deals in the pipeline. One deal in the investor group touts a signed purchase order worth up to $104 million with an unnamed EMEA “defense entity,” likely in the Middle East, for a system that can identify unknown or friendly forces, detect small boats, and detect Drones. (Monagala declined to name the country specifically.)

Munagala told TechCrunch that he expects Blaize to be worth $1.2 billion after the SPAC merger. That’s lower than private valuations for other companies like Cerebras, a closely watched AI chip maker that filed to go public last fall. It was seeking to double its $4 billion valuationAs TechCrunch previously reported. However, Cerebras has not yet gone public, as some investors had concerns about its over-reliance on a single client in the Middle East. investors told CNBC.

In contrast to Blaize, Cerebras focuses on data center chips. Blaize going public is ultimately a bet on a future in which AI chips move out of centralized data centers and become more integrated into physical products.

“All this hype around AI is happening in the data center. It’s interesting that they completely neglected and forgot the real physical world use cases that are touching people’s lives and happening right now and making money. “We’re focused on the practical use of AI in the physical world.”

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