Cerebras Goes Public in Year's Biggest IPO

Summary

Bloomberg Tech: Cerebras Goes Public in Year's Biggest IPO

Date: May 14, 2026
Hosts: Caroline Hyde, Ed Ludlow, Mark Gurman

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Episode Overview

This episode of Bloomberg Tech centers on the year’s most significant US tech IPO: AI chipmaker Cerebras’ public debut, raising $5.55 billion. The show also covers major movements in global markets—Cisco’s resurgence, Klarna’s surprising profitability, and key diplomatic meetings between the US and China, with impacts on tech companies. The climax of the episode is an in-depth interview with Cerebras CEO Andrew Feldman, who discusses the company’s technology and the implications of its public offering.

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Key Discussion Points & Insights

1. Cisco Surges Amid AI Infrastructure Boom

• [02:25–05:48]
  • Cisco shares soared 15% (at one point 17%), following strong earnings and increased demand from hyperscalers.
  • The firm’s AI infrastructure positioning is validated, with $9 billion in hyperscaler order forecasts for 2026, up from $5 billion.
  • Job cuts (4,000 roles) are positioned as focusing investment toward AI.
  • Quote:
    "Cisco is now really part of the AI infrastructure firmament...There is a lot of optimism that Cisco is now really part of this, this technology build out, just as it was in the Internet tech build out." – Ryan Vasilica, [03:45]

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2. Klarna’s Comeback and Fintech in Focus

• [05:48–07:09]
  • Klarna shares jumped 15–16%, swinging to profit and posting $1 billion revenue (up 44% YoY).
  • Driven by higher interest income, debit card growth, partnership fees.

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3. Cerebras IPO: Unprecedented Demand and Market Impact

• [07:09–08:53]

  • Cerebras’ IPO was over 20x oversubscribed, with $10B in demand pre-launch.
  • Indicated to open at nearly double the IPO price; market cap possibly approaching $80–100 billion.
  • Investors compare Cerebras’ potential to Nvidia’s $5T valuation, reflecting the insatiable hunger for AI hardware.
  • Quote:
    "This is the hottest stock, at least from an IPO perspective, this year, bar none." – Bailey Lipschultz, [07:09]

• Major concern in earlier IPO attempts was customer concentration (previously just G42)—now mitigated with wider customer base (e.g., OpenAI).

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4. US–China: Diplomatic Summits and Tech Relations

• [09:33–13:15]
  • Coverage of President Trump’s summit with President Xi Jinping: Focus on stabilizing US–China ties, with Taiwan and Iran key topics.
  • Commitment from China not to supply Iran with weapons; hints at potential progress on Middle East stability.
  • Xi warns Taiwan matters could derail US–China relations; the US maintains status quo.
  • Xi reassures top US tech CEOs (Elon Musk, Tim Cook, Jensen Huang): “China’s door to the outside world will only open wider.” [11:55]
  • Ongoing concerns remain over real market access and policy changes for US tech in China.

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5. Semiconductors: Taiwan’s Strategic Relevance

• [13:15–16:44]
  • Taiwan’s position as a semiconductor hub is underscored in interviews (with Michelle Guide) and its importance to US industrial strategy reaffirmed.

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6. Ericsson's CEO on US/China Tech Competition and AI

• [21:59–27:37]
  • Börje Ekholm (Ericsson CEO) on navigating global tech competition, with China as both a supply chain partner and fierce competitor (Huawei as benchmark).
  • The world is “interdependent”—staying at China’s technological curve is key, since developments emerge there first.
  • Ericsson’s flexible manufacturing footprint (US, India, Japan) helps manage geopolitical risk.
  • AI seen as a “massive opportunity,” with the need for edge computing and connectivity set to transform and boost demand for Ericsson’s technologies.
  • Quote:
    “If you’re not there when [technology] happens [in China], you don’t develop the technologies at the same pace as they do in China.” – Börje Ekholm, [23:55]
    "AI will ultimately move out to the physical world... that's going to require inference at the edge." – Börje Ekholm, [26:41]

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7. Spotlight Interview: Cerebras CEO Andrew Feldman on Going Public

IPO Reaction & Significance

• [28:23–28:47]
  • Andrew Feldman: “It’s the biggest tech... and the biggest semi IPO in history. We couldn’t be more proud.”
  • Marks culmination of a decade of development, with strong morale boost for the company.

Cerebras’ Market Position

• [29:17–30:34]
  • Massive $20B deal with OpenAI for 750 MW of compute announced.
  • Additional engagement with a major US cloud provider (likely AWS).
  • Dozens of smaller ($10–$50 million) deals.
  • Claim: Cerebras’ inference system is “15x faster than the next nearest competitor.”

Moving from Engagements to Revenue

• [30:34–31:48]
  • Finalizing contracts with hyperscalers (cloud providers) expected soon; sees vast channel opportunity via cloud integrations.
  • Quote:
    “We are extremely confident that they will be an enormous channel for us and a partner in delivering our technology to... enterprises around the world.” – Andrew Feldman, [31:24]

Retail Investors and IPO Allocation

• [32:27–32:58]
  • Feldman acknowledges disappointment; oversubscribed 25x, so tough decisions on allocation.

Full Stack Strategy and Margins

• [32:58–34:21]
  • Cerebras builds everything “top to tail”—from silicon wafer to finished supercomputer.
  • Current gross margins at 40–41%; seeking further improvement as supply chain scales. Potential to raise prices thanks to outsized demand for fast inference.

Wafer-Scale Innovation & System Integration

• [34:21–36:24]
  • Explanation of custom, unprecedented wafer-sized chip:
    • “This chip is the size of a dinner plate, while traditional chips are the size of a postage stamp.”
  • Only possible thanks to proprietary system integration—just selling chips wouldn’t provide the same performance boost.
  • Analogy: “You could ask the same thing about Porsche. Why don’t you just sell engines?”

Use of IPO Proceeds & Next Steps

• [36:24–36:52]
  • Funds to be used for scaling capacity and bringing more customers on board: “We can be aggressive on that front.”

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8. Wearables and AI: Interview with Oura CEO Tom Hale

• [40:21–45:16]
  • Oura leverages AI for health insights, striving toward longer-term predictions (beyond “you might be getting sick soon”).
  • Pursuing FDA validation for medical uses (e.g., blood pressure monitoring).
  • Company culture: Highly complementary with Apple, even as “frenemies” (shared customers and talent).
  • Hardware’s resilience highlighted during the AI software boom:
    “You can’t vibe code atoms… hardware is very, very attractive right now.” – Tom Hale, [43:42]
  • Announces US manufacturing plans to mitigate tariffs, supply chain risks.

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9. Tech Market Roundup

• [45:25–51:01]
  • Report: Elon Musk’s company Xi is courting Wall Street with Grok chatbot, testing with major finance firms—but the product lags on financial applications.
  • Alphabet (Google) taps Japanese bond market after record US sale—part of trend for tech giants to seek global debt funding for major capex needs.
  • US companies like Foxconn (Hon Hai) increase AI server production in the US.
  • Chinese tech (Alibaba, Tencent) see growth slow amid fierce competition.

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Notable Quotes & Moments

• “It’s the biggest semi IPO in history. We couldn’t be more proud. This is the culmination of a decade of work, of countless late nights and long weekends.”
  – Andrew Feldman, Cerebras CEO, [28:47]
• “We’re the fastest, not by a little bit, but by more than an order of magnitude. You know, we’re 15 times faster than the next nearest competitor.”
  – Andrew Feldman, [29:46]
• “We were more than 25x oversubscribed. There was a lot of hard decisions that needed to be made and nobody got what they wanted.”
  – Andrew Feldman, on IPO allocation, [32:27]
• “If this is just a drop in the bucket, there’s a pretty much massive potential.”
  – Bailey Lipschultz, [08:08]
• “You can’t vibe code atoms… hardware is very, very attractive right now because you can’t just summon [products] into existence.”
  – Tom Hale, Oura CEO, [43:42]

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Important Timestamps

• [02:25] — Cisco’s stock performance & AI infrastructure context
• [07:09] — Cerebras IPO analysis and demand
• [09:33] — US–China tech diplomacy; meeting summaries
• [14:07] — Taiwan & semiconductors context
• [21:59] — Ericsson CEO on interdependence, China, AI
• [28:23] — Cerebras CEO Andrew Feldman interview begins
• [29:46] — Cerebras’ key partnerships & performance claims
• [34:21] — Explanation of wafer-scale innovation
• [36:37] — Use of IPO funds
• [40:21] — Oura CEO Tom Hale on AI, hardware, FDA process
• [46:11] — Xi (Musk) and investment in AI chatbots
• [49:18] — Alphabet’s global bond market moves, tech capex trends
• [51:01] — Cisco and market wrap-up

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Tone & Language

The hosts maintain a sharp, fast-paced, and deeply analytical tone, balancing market excitement (especially around Cerebras’ IPO and solid AI growth stories) with informative skepticism—asking for specifics on financials, customer diversification, and the impacts of global diplomacy on tech. The CEOs interviewed speak with pride, technical confidence, and a sense of accomplishment.

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Summary

This episode delivers an essential snapshot of the global tech landscape at a time when AI, hardware innovation, and geopolitical dynamics are rapidly reshaping the fortunes of tech’s biggest players. Cerebras’ record IPO is dissected from every angle, Cisco’s AI pivot is lauded, and the power struggle between US and China—especially relating to semiconductors—frames the wider discussion. The episode is a must-listen for anyone interested in the business of technology, public markets, and the new AI-driven future.

Transcript

[Deloitte Representative]

The right technology can strengthen human judgment. That's why Deloitte brings together AI and data analytics with multidisciplinary teams who can help you connect the dots across your enterprise, from risk to operations to customer needs. So opportunities don't slip by and surprises don't spread. Because the smarter your systems, the sharper your instincts. That's how technology makes people better at what they do best. Deloitte together makes progress. Learn [e-mail] TogetherMakesProgress

[Mark Gurman]

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[The Hartford Representative]

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[Bloomberg Host]

Bloomberg Audio Studios Podcasts Radio News.

[Andrew Feldman]

Bloomberg Tech is live from coast to

[Bloomberg Host]

coast with Caroline Hyde in New York and Ed Ludlow in San Francisco.

[Mark Gurman]

This is Bloomberg Tech. Coming up, Cisco shares jumped the most since 2011 of the company's earnings. Results will break them down. Plus, China's Xi Jinping gives a warning to President Trump on Taiwan, but tells US tech CEOs China will open up more and AI chip maker Cerebrus raises $5.55 billion in its US IPO, seizing on the surging demand for semiconductors. Will be joined by the CEO later this hour. Cisco is our top story and it is actually rising with the rest of the market. We're up 15% on track for our biggest jump since 2011. After the open we hit 17% putting Cisco on track for its best day since 2002. It's pretty simple story. Hyperscaler demand calendar year 26, $9 billion up from a previous forecast of $5 billion. 4 billion of that will translate into actual revenue sales on the income statement in this year. There are many more threads but Cisco is finding its place in this infrastructure story. Let's get out to Bloomberg equities reporter Ryan Vasilica. I think Ryan, the best place to start is what has the sell side reaction been to this? What are the analysts saying? The main thread of their enthusiasm Cisco has been this morning analysts are very

[Ryan Vasilica]

positive and very optimistic that Cisco will be able to continue kind of putting up these numbers that we saw this past quarter. There is a lot of optimism that Cisco is now really part of the AI infrastructure firmament. It showed very strong demand as you said, from the hyperscalers. It's pointing to very strong growth going forward. I think there's been a growing realization this year that the sort of optical and networking companies are a huge part part of the whole data center build out. And obviously we have seen no end of demand and growth for data centers related to AI. And Cisco is really well positioned in that it's a legacy company. It has a wide product suite that people are using here. It seems very well positioned and it does seem like analysts are really sort of seeing additional confirmation of this trend.

[Mark Gurman]

Ryan, there's so much to pack into Bloomberg Tech today. People are saying why starting on Cisco, the markets team is looking at the equities market widely and Cisco is a big factor in kind of the feel good that's out there. Networking is your cables, your switches, your routers that all goes into real data centers. Right. But the other part of the story is Cisco's discipline. They're cutting about 4,000 roles. How did the company kind of spin that as a positive in that sort of feel good around AI in the market today?

[Ryan Vasilica]

Well, they talked about how they are really focusing and prioritizing AI. You mentioned the job cuts. It does seem like all of their investments are really geared toward this end market in particular. So there is a lot of optimism about that. And I would just say as I'm sure you remember, Cisco was one of the major companies of the dot com era build out now it saw huge growth at that time and it only recently surpassed its.com/era high. So there's a certain amount of poetic justice I guess and the fact that AI is the thing that is finally bringing it back to record levels. It does seem like it is now becoming a real part of this, this technology build out, just as it was in the Internet tech build out.

[Mark Gurman]

Ryan, you and I were not doing this in the dotcom era, but here and now, Cisco is a big story. Bloomberg's rhymes Delica on the equities desk. Thank you so much. Now the stock we're watching is Klarna. Looking at shares also up 15, 16%. The company posted just $1 million in first quarter net income, but it beat estimates swinging from a $99 million loss a year ago. This in the fintech space, right? Revenue jumping 44% to $1 billion driven by higher interest income, growth in debit card signups, partnership fees is another one that we had to fit in in a very busy Thursday morning. Today, all eyes are on Cerebras, the company set to begin trading after pricing its IPO at $185 a share, raising $5.55 billion, the biggest US IPO of the year so far. It has been mayhem in the market so far. Shares were indicated at one point to open at $400 a share, 400 having priced at 185. I think we're now back down at $350 a share as of 1 minute past 8 Pacific time, 1 minute past 11am Eastern time. Bloomberg's Bailey Lipschultz has been my partner in tracking the chaos of this IPO for a good few days now. Let's start with the math. Yeah, the indicated opening price well beyond $185 a share. What's that telling us?

[Bailey Lipschultz]

It tells us that there's untapped demand. And when you look at a deal like this, more than 20 times oversubscribed. We reported before it even launched there was $10 billion of demand. So these are huge numbers. This is the hottest stock, at least from an IPO perspective this year, bar none. The big question, and you asked me, you know, look at the market cap of where this could open if we're getting closer to $80 billion. Talking to folks on the buy side, they're still saying, you know, if Nvidia is worth $5 trillion, who's to say that this company doesn't easily trade closer to 100 billion? I don't know what you've been hearing about that from your side, though.

[Mark Gurman]

Yes, exactly. That brings us back to like, what is Cerebras? What does it do? Well, it is a full stack, vertically integrated supercomputer maker, right Nvidia makes largely the chips, but the server trays. These days it doesn't build its own servers. Dell does that. Supermicro does that. Cerebras does the full send package. But even at $100 billion, it's a drop in the ocean. Why is the market so enthusiastic about its technology? Like, what else do we know about this company's financials or its customer backlog?

[Bailey Lipschultz]

The big thing initially when they tried to go public two years ago was concentration risk. So G42 was pretty much their only customer. They've expanded that. Now you have OpenAI and others in the big pitch ad, at least when I talk to folks on the buy side is how broad based can that be if we're dealing with a market especially, especially as it relates to building some of the compute and everything that goes into building out the future. If this is just the start and we're in early innings, what does this ultimately look like? Call it five years from now. And the big question is back to your point earlier, if this is just a drop in the bucket, there's a pretty much massive potential. As it relates to going forward though, again, all things considered, we've seen semiconductor index up, what, 30% since they started

[Mark Gurman]

process, I would say indicated opening prices. They're on the Bloomberg terminal. They're not always right. Who knows what will happen when trade starts With Bloomberg's Bailey Schultz, Please don't go far. Stay with Bloomberg Tech because coming up later this hour, we will speak with Cerebra CEO Andrew Feldman. And if you're on the socials, hit me up. I welcome your questions. Now coming up, China's Xi Jinping gives a warning to President Trump on Taiwan. We're going to have those details next. This is Bloomberg Tech,

[Andrew Feldman]

One of the

[Tom Hale]

most important summits in human history.

[Mark Gurman]

And the two, the two presidents, President

[Tom Hale]

Xi and President Trump have such a wonderful relationship.

[Mark Gurman]

This is an incredible opportunity for us to rely on the relationships to build

[Tom Hale]

a much, much better partnership.

[Mark Gurman]

Did you get any specific customers for your chips for the H200? We didn't really talk about. I'm here to support the president and

[Tom Hale]

to represent the United States.

[Mark Gurman]

That was Nvidia CEO Jensen Huang speaking to reporters in Beijing and telling Bloomberg the company hasn't really discussed the H200 chips during the president's trips to China. He's there to support President Trump. What was discussed, though, is Taiwan Xi Jinping through state news agency calling it, quote, highly dangerous situation for the world's biggest economies. Let's get out to Bloomberg's Tyler Kendall, who joins us from Beijing. There are many threads. We also have the breaking news of the last 15 minutes. The President saying that Iran was discussed and that there is some sort of agreement there. What do we need to know? What's the latest from China?

[Tyler Kendall]

Well, at this point, as you're saying, there are are a lot of different threads that we could pull on here. I can't say that the overarching theme appears to be that the efforts here in Beijing are aimed at stabilizing ties between the US And China rather than overhauling them. If we start with the latest news, President Trump out saying that Xi Jinping has pledged not to supply Iran, Iran with any weapons and that it's going to help get Iran to the negotiating table. Perhaps this will help make some progress when it comes to what has been gridlock in those ongoing discussions as well as a reopening in the Strait of Hormuz. Though we would be remiss if we didn't point out that from the Chinese readout we didn't really get any indications that China is willing to go further in terms of helping to ease that conflict, saying instead that they had extensive dialogue about the situation in the Middle east, but not really giving us any firmer details there. Another point where there appeared to be a mismatch in terms of the public readouts from what happened behind closed doors was, as you mentioned, that issue related to Taiwan as Chinese President Xi Jinping basically threatened that Taiwan could derail the US China relationship. That was not mentioned when it came to the US Readout in this. And in fact, we just heard from Secretary of State Marco Rubio, who appeared to downplaying that the concerns were raised after we really saw US Officials in recent days signal that there would not be a change when it comes to US Policy regarding Taiwan. Now we can say, though, that there was a more optimistic tone reached when it came to the economic issues, including the fact that Chinese President Xi Jinping did appear to signal a move towards greater openness, telling tech execs in the room, including Elon Musk, Tim Cook, Jensen Huang, who traveled with President Trump in part quote, that China's door to the outside, the outside world will only open wider, though despite the messaging, we haven't really seen tangible signs yet that any steps have been taken. But Chinese state media did report that these executives told Xi Jinping directly that they highly value the Chinese market. And as you well know, this U.S. business delegation includes these companies that already have high exposure to the Chinese market, but also companies like Micron which have seen some of their products barred over cybersecurity concerns here in China. We can't say at this point there's still a lot that we are waiting for, potential purchase agreements when it comes to agriculture, Boeing aircraft or energy products from the U.S. but the dialogue does continue. These pair of leaders do have bilateral meetings going into tomorrow as well.

[Mark Gurman]

Bloomberg's Tyler Kendall with everything you need to know out of China so far in the meeting between President Trump and China's Xi Jinping. Thank you very much. And let's get the broader picture with Michelle Guide, a CEO. The Crack Institute for Tech Diplomacy at Purdue, also served as Assistant Secretary of State for Global Public affairs under the first Trump administration. You understand how this works and you understand what's at stake. And like here on Bloomberg Tech. Right. I want to start with Taiwan because for a very long time you've been coming on this program and we've been talking about Taiwan in the context of America's dependence on that nation for semiconductor supply. Right. I'm literally talking about TSMC and the manufacturing footprint in China in Taiwan. Apologies if we learn anything new here on Taiwan. What did you make of President Xi's statement, I suppose through the state agency?

[Michelle Guide]

Nothing's new here. I think the position that China has taken on Taiwan being really important to them when it comes to US China relations has been the case for quite some time. We know that General Secretary Xi Jinping has been pressuring the president on arms sales to Taiwan for a while. So that's not new at all. And neither is the United States position on maintaining the status quo. As Secretary Rubio said, there's been no change on the US Position here with regards to Taiwan. But as you had mentioned, you know, the ties between Taiwan, the United States are strong. They run deep. Semiconductors are a critical piece of that. And there's been a lot of collaboration with TSMC building out here in the United States increasingly more over time. And, and I think ultimately the status quo hasn't changed.

[Mark Gurman]

A red headline on the Bloomberg terminal just before we came on air, President Trump saying that President Xi offered help on Iran and pledged not to send weapons to Iran. The president has said that it wouldn't be an important topic of conversation. But actually if you look at like what markets are saying and what people are saying on socials, it's a key issue, particularly on how it would have a bearing on the street of Hormuz.

[Michelle Guide]

It's been one of several key issues. I think it's not surprising that they talked about Iran it was looming over this entire 36 hour summit. The fact that you had mentioned this breaking news that President Xi is going to stop supporting the Iranian regime is a positive step and I think one that the United States States would welcome. So again, not surprising. And I think overall the big picture on this is, you know, this is a 36 hour summit and on all of these agenda items and ultimately micro movements in a much bigger picture here of the United States and its long term view to achieve the golden age of America and retain our leadership in across the world. And China is on its own path to China rejuvenation. And the big question is who gets there first?

[Mark Gurman]

First.

[Michelle Guide]

And did the 36 hours in this summit help the United States move incrementally faster toward our vision?

[Mark Gurman]

I just want to disclose the Bloomberg Tech audience that President Trump in those comments about Iran and President Xi's commitment for Iran, that was part of a Fox News interview, a clip that Bloomberg reviewed. Michelle, would you kindly draw on your experience from, from participating in the first Trump administration? What does it take to put a delegation like this together that includes Elon Musk, Jensen Huang picking them up in Alaska for the refuel stop on Air Force One and taking the world's Most important tech CEOs to China as part of a high stakes meeting between President Trump and President Xi?

[Michelle Guide]

Yeah, these, these things take a lot of preparation historically and especially in terms of what you want the meetings to be about. The readouts coming out of these meetings, however, I will say this, this type of delegation is unprecedented. Unprecedented. And I think if you look at how the President has been agile and maybe non traditional in his, his work. So, so are these tech CEOs. They move fast and they're disruptive and it's easy to hop on the plane in Alaska and go to China. So I'd say, you know, there's a lot of planning at the same time with, with this administration, with these types of disruptive tech leaders. There's also a lot of room for ad libbing and improvisation and I think that's what we're seeing here.

[Mark Gurman]

Michelle got a CEO at the correct Institute for Tech Diplomacy at Purdue. Thank you very much. Now coming up, we're going to get out to Napa Valley for our own Caroline Hyde set to speak with the CEO of Ericsson on the sidelines of the Spark Global Leadership Summit. It's coming up next. This is Bloomberg Tech.

[Deloitte Representative]

The right technology can strengthen human judgment. That's why Deloitte brings together AI and data analytics with multidisciplinary teams People with deep industry experience who can challenge assumptions and help you connect the dots across your enterprise. From risk signals to operational pressure points to shifting customer needs, Deloitte helps you see what's coming sooner so opportunities don't slip by and surprises don't spread. It's not just dashboards. It's real clarity in the moments your decisions are made. When models reveal patterns, people can ask better questions. When data and people are connected, leaders can move faster with confidence. And when your teams are aligned, smart choices can scale from the frontline to the C suite. Because the smarter your systems, the sharper your instincts. That's how technology makes people better at what they do best. Deloitte Together makes progress. Learn [e-mail] TogetherMakesProgress support for the show

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[Mark Gurman]

Nuclear power is trying to make a comeback, but the resources required are in short supply. From uranium mining to enrichment, the supply chains being reshaped by geopolitics, lobbyists, rising energy demand, new technologies. That's the focus of Bloomberg Primer this week. Listen to this.

[Bloomberg Host]

Global investment in Nuclear energy since 2020 is estimated to be around $300 billion with ambitious plans in Europe, North America and as or kickstart their nuclear energy sectors. Every step of the supply chain, from mining to enrichment to building reactors is highly regulated and controlled. Because a single misstep could be catastrophic and erode the public trust nuclear has worked decades to regain.

[Ryan Vasilica]

It's a real shift from when I

[Bailey Lipschultz]

came of age and everyone was worried

[Mark Gurman]

about nuclear war because the process of enriching uranium for nuclear fuel, same technology

[Ryan Vasilica]

that they use for enriching uranium to make nuclear weapons.

[Mark Gurman]

Catch the full episode of primer on bloomberg.com and YouTube. Let's get over to the spot Global Leadership Summit in Napa where our own Caroline Hyde is standing by car.

[Bloomberg Host]

It is a tough life being hosted by Cancelo here in Napa Valley. And I'm very pleased to say I'm joined by a giant in telecoms based in Sweden. Ericsson is a global company and Worry Akom is here with me. Who is the CEO. All right, tell me about the China exposure you have. You have supply chain there, you have consumer. And competition is really what you have from China. What did you make of the relationship between the US and China that we just saw overnight?

[Börje Ekholm]

Thanks for having me. That's a great question to ask. Very hard to answer. Actually.

[Bloomberg Host]

We like to do that in journalism.

[Börje Ekholm]

No, I know, I know, but I think there is, you know, China is started out as I often look at the old telecom movie from China. It actually started out as being a prioritized sector in China. So they had almost 100 vendors. If you go back 30 years, they consolidated into really two that became fierce competitors over a decade.

[Bloomberg Host]

Huawei being one key one, Huawei of

[Börje Ekholm]

course being the biggest. And they started out being of course low cost and fairly simple. Today they're of course a phenomenal competitor. And it's the one that we benchmark ourselves with and say that's the one we need to beat. Actually, we need to win on technology, we need to win on cost position. So for us, the competition with China is front and center and has been. And I do believe that for the rest of the world to compete with China, you need to lead on technology.

[Bloomberg Host]

But you've been outspoken in the past sort of pushing against this idea of, of sort of a focus on your own country and banning In Sweden they pushed out Chinese competition and you actually at the time said that's the wrong thing to do in the US that is your, your key markets now are the us, the Japan, there are other nations. How do you think about the China being excluded and should they be?

[Börje Ekholm]

You know, the way to think about, about China is actually it's multi pronged. So if you take telecom, again it's a scale game. They have scale in their domestic market. That's a market you need to be in. But more importantly, what was also clear is that given the development in China economically and use case wise, you saw data consumption grow much faster in China than anywhere else in the world. That led them to lead on or demanding certain technologies ahead of the rest of the world. So unless you're on the same development curve as they are in China, we're not going to be able to bring those solutions globally. So if we take in our case, we have what's called massive mimo. Basically it's a way to increase capacity in the radio network. They needed that earlier than in the rest of the world. And therefore if you're not there when that happens, you don't develop the technologies at the same pace as they do in China. So I think it's a much more interdependent world. You need to think of the world as being interdependent and you're dependent on

[Bloomberg Host]

geopolitics, tariffs, inflationary pressures, the Strait of Hormuz again front and center today. How are you managing that?

[Börje Ekholm]

You know, we actually took a decision a number of years ago now to say that we have three hopes market. So that was recognizing the US because it's a front runner market big. India in those days was big. Today it's starting also to be frontrunner on technology. Japan, Japan is very big in telecom and also an early adopter of telecom. So we said that's markets we need to win in to make sure that we combat the scale of the China. So we did that. Then we said we need a flexible supply chain in order to manage any disturbances. So we built a factory here in

[Bloomberg Host]

the U.S. how big is your manufacturing

[Börje Ekholm]

now here in the U.S. we manufacture pretty. I mean a large portion of what's supplied to the U.S. is manufactured here in the U.S. so we built that in 20, commissioned it about 2020. So we were ahead of the really supply constraints in that sense and the tariff issue issues. So we've been able to use that manufacturing footprint, R and D footprint to actually manage a bit of the geopolitical exposure.

[Bloomberg Host]

Now we look at the markets today and extraordinary ramp higher on the back of AI. AI is the excitement in your area as well. Look, you've got competition with Nokia who has got a strong relation with Nvidia and they've gone big into Datacenter. Briefly, how are you thinking about the opportunity?

[Börje Ekholm]

We think of the AI opportunity as a massive opportunity for us for the simple reason that AI will ultimately move out to the physical world, call it industrial AI, physical AI. And that's going to require inference at the edge of the network to manage the latency requirements, etc. And then connectivity will be needed. So we will start to enter a world where everything has to be connected. So when everything is connected, you can't connect them with wires, it just simply doesn't work. You're going to need the terrestrial cellular network to provide the backbone to scale AI. So I think of AI, yes, it's going to fundamentally change the economy. It's going to be a driver of productivity. It's hugely positive and for us it will be a benefit because we will see new type of traffic coming in the network.

[Bloomberg Host]

Where I could talk to you more. I'm luckily going to be talking to you in a panel a little bit later here at the SPOT Leadership Summit hosted by Consento Ed. Back to you.

[Mark Gurman]

All right, coming up, Cerebras IPO time, the big conversation. This is Bloomberg. Welcome back to Bloomberg Tech to our TV viewers and radio listeners around the world. We're joined by Andrew Feldman, Cerebra CEO. Cerebras price. This IPO, Andrew, $185 a share above the top end of the market range. I'm looking at the Bloomberg terminal shares indicated to open $350 a share. Your reaction to that?

[Andrew Feldman]

Pretty good day, huh?

[Mark Gurman]

I feel, I mean, did you see this coming? There's some mechanics to it, right? But you know, I know you, I know you like to, let's be honest, you like to talk about what's happening in AI. The big focus on inference, cerebral, his place in it. But this is the biggest IPO of the year so far. You know, what does it mean to you and your employees and your backers?

[Andrew Feldman]

It's the biggest tech, one of the biggest tech IPOs in history and, and it's the biggest semi IPO in history. We couldn't be more proud. This is the culmination of a decade of work, of countless late nights and long weekends. We are enormously proud and excited and ready to get back to work and start working on the next great thing again.

[Mark Gurman]

The market is indicating shares to open at $350 a share. Let's see where we're at when trading starts. But you're being priced in as a major player in this field. Now what evidence would you point to that you are in fact a major player? A lot of focus is on the concentration in the relationship with Open Air. Tell me about some of the other Frontier Labs or other names that you have some concrete talks with.

[The Hartford Representative]

Sure.

[Andrew Feldman]

In the last four months we announced a deal with OpenAI that's north of $20 billion for 750 megawatts of of compute. We also announced a major engagement with us where our equipment would be deployed in their data centers. I think those are obviously, obviously the largest but there are dozens of others that are in what used to be a big deal in the 10 to $50 million category. And so there's just an extraordinary demand right now for fast inference. We're the fastest, not by a little bit, but by more than an order of magnitude. You know, we're 15 times faster than the next nearest competitor. And as AI has become useful, everybody wants to it to be fast.

[Mark Gurman]

Nobody wants to wait on that, you know, 21x on, on, you know, performance and also like a lot of emphasis on the dollar per token. Right. That that is the metric that the field cares about. But that's on paper. You know, you just talked about the relationship as an engagement. When does the word engagement end and real revenues start to show up for you from those relationships? Sure.

[Andrew Feldman]

We see we signed a binding term sheet with us as described in our RS1 and we're working through the master agreement. I think in dealing with organizations of that size it takes a little time to dot all the I's and cross the T's. But we are extremely confident that they will be an enormous channel for us and a partner in delivering our technology to, to large enterprises and medium sized enterprises around the world. I think they are one of the preferred cloud providers for just about every enterprise on earth. And so an opportunity to have your solution embedded in their offering as part of their bedrock offering. That's a huge win for us.

[Mark Gurman]

We're live on Bloomberg Television and radio. This is a Bloomberg Tech takeover and we're speaking to Andrew Feldman, the CEO of Cerebras whose company just priced the IPO at $185 a share and is indicated right now I'm looking on the Bloomberg terminal, maybe to start trade at $350 a share. Andrew, I think you know this about me. Whenever we have a big moment to have a conversation like this, I always go to the Bloomberg Tech audience. What do they want to know? And actually the first question is what was your attitude toward retail investors? Why did you not do more for the retail investor in this big moment for your company?

[Andrew Feldman]

We were more than 25x oversubscribed. There was a lot of hard decisions that needed to be made and nobody got what they wanted. And you know, we did our best. It's about all you can do when, when there's 25 times more demand for your stock at the institutional level and at the, at the retail level than there are shares to be sold. So we're really proud of the way we chose to do it. We thought we did it with integrity and I think we are very comfortable

[Mark Gurman]

with, with the ending allocation, full stack, fully vertically integrated. And what I mean by that is you literally build the supercomputer top to tail, right? So Nvidia will do the tray, not just gpu, but then Dell Super Micro will assemble it. Those margins, low teens. Nvidia's margins mid-70s. Your margins 40, 41%. And what I'm trying to help the audience understand is why that strategy of owning everything top to tail is going to pay off in the long run. And I would say the other question I get for you is what's the future outlook for margins based on your plans?

[Andrew Feldman]

Well, I think a couple of things. I think we have obviously opportunities at, to improve our cost structure. You know, we did half a billion last year in sales. That means we put 250 million in the supply chain. Obviously that's not an efficient spot. As we grow, we will have more leverage in the supply chain and our cost of goods will come down. I think we have in our opportunity to, to increase prices. I think the demand for, for fast inference is overwhelming this minute. And so I think in the, in the long run we'll be really proud of our, of our gross margins and where they will sort of wash out as we hit scale.

[Mark Gurman]

I've got a question for you from, from a terminal client via ib. Thank you for the question. Everyone's tuned in right now, Andrew. They want, they want, they want the detail. And so one way that people look at it is that, you know, this is custom silicon, but Cerebras isn't, isn't a chip per say. It's like wafer level, right. Is there a reason why you can't just sell that versus the whole server?

[Andrew Feldman]

Yeah, that's a good question. For the entire 70 year history of the computer industry, every previous effort had failed to build a chip of this size. So for your, for your audience, this chip is the size of a dinner plate, while traditional chips are the size of a postage stamp. And not only had everybody failed until we succeeded, but several tried to copy us and have since failed as well. Part of the, part of what we were capable of doing and able to do was that we were able to use not just the chip, but also our expertise in packaging and in system design to solve some of the problems and build a truly compelling solution.

[Tom Hale]

Right.

[Andrew Feldman]

You don't just get 15 or 18 or 20 times faster than the competition because you built a good chip. That's one of a collection of different things that, that enable that sort of performance. You can build a great chip and the system vendor, the ODM can nibble away at your performance by not delivering the right amount of power or the right amount of IO. Right. There's, there's a reason why in video then sought to control the IO, the NV link, because they didn't want others to nibble away at their performance. And so by, by building the system, we were able to optimize all parts. I mean, you could ask the same thing about Porsche. You know, why don't you say sell just engines, right, Andrew? Turns out that that's an i11 is a, is a beautiful car because of the engine and everything else they put in it.

[Mark Gurman]

Andrew, the team's telling me we got to go, but I got to ask you, $5.5 billion. What do you use the proceeds for? And actually how flexible can you now be in allocating capacity to new customers? We just have 30 seconds.

[Andrew Feldman]

Oh, I think we, we'll use it to increase capacity. We are excited to bring many new customers on board. There's tremendous demand for what we're doing. I think we can be aggressive on that front.

[Mark Gurman]

Andrew Feldman, Cerebra CEO Pricing the IPO185 indicated to open $350 a share. Thank you for your time. Now coming up, Tom Hale, the Aura CEO, discusses the future of wearables. We're going to go back to the Spark Summit next. Bloomberg Tech.

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[Mark Gurman]

Let's go back to the Spark Summit, where our own Caroline Hyde is standing by.

[Bloomberg Host]

I am the Cancello Spark Summit right here in Napa Valley. And with wine comes a focus on your health. And many might be looking at ordering today to see how they're feeling after a day in Napa Valley. And I'm joined by Tom Hale, of course, the CEO of Aura. And we're so exuberant in the market, whether it be personally about artificial intelligence. I'm interested as to how you're seeing your end product iterate. We're all about now prediction, not just assessing how I might feel on the day or the inputs that I'm getting, but predicting how I might in the future.

[Tom Hale]

Yeah, we've been doing AI for many years. The thing that's most interesting is that the predictions that we make generally are short term. You might be getting sick in a couple of days. Your cycle's coming in a couple of days. And they're very accurate because they're short term. But I think where this starts to get really interesting is if you can make predictions over a longer time frame, you're starting to help people understand how their behaviors can bend the curve on their health outcomes or maybe even ultimately on the cost of health care. And I think this is is really disruptive, but also really positive because one of the biggest problems with health care is there's just simply not enough care to be provided for everybody. And AI lowers the cost and provides access and provides medical information. It has to be high quality. It has to be scientifically validated. It has to be accurate and good. But that opportunity exists. And so we're pretty excited about how AI can transform healthcare and the moment

[Bloomberg Host]

an Oura ring is deemed a general wellness product. But there could be even further ways in which you move within the medical space that requires FDA approval, particularly for blood pressure, for example. How are you thinking about that, getting the science on board?

[Tom Hale]

Well, our view is that we want to be as aligned with the FDA as possible. We want to make sure that what we do is in the path of scientific and medical validation that includes the fda. So we're working closely on multiple submissions. Blood pressure is certainly one of them. We're currently running something called the blood pressure Profile study. That's almost 300,000 people who are taking cuff measurements and comparing to the predictions that the ring is making. So we'll have a data set that'll support the idea that what this does is accurate, validated, clinically relevant. Until that time, we'll probably operate as a wellness device, which means that we can provide insight, but not something that's like a diagnosis. We'll stop short of that.

[Bloomberg Host]

Look, the FDA doesn't have someone at the top right now. Does that affect the way in which you work?

[Tom Hale]

Yeah, not really. I think we're very excited to see how we can work with cdrh, which is the division of the FDA that focus on that. So we're working with the rank and file, the people who are focused on medical devices, and we have a great collaboration with them.

[Bloomberg Host]

You have a great collaboration with Apple, but you're also kind of frenemies in some way direct it that way where you've taken some significant talent from them.

[Tom Hale]

Well, I think the interesting thing about how Apple and Aura interact is that it turns out that almost two thirds of oura ringwears have a second wearable, most often a wrist wearable and most often an Apple watch. So we're actually highly complimentary. Now going to the people, there's great talent. Apple has produced some of the icons of health and hardware. And I think having some of those people join our team has been an incredible. I don't know, we feel very proud of the people who've joined us and we've got some, we've got some great connectivity with Apple as well. I'm a longtime independent software developer on the Apple platform. So we have a lot of people that we have been working with for years.

[Bloomberg Host]

Software developers are not cheap in this age of AI. How are you thinking about your talent more broadly?

[Tom Hale]

So for us, the interesting thing is about a year ago, people were like, wow, I mean, hardware is hard. Why are you doing hardware? Of course, the first rule of software school is you don't do hardware. So I've obviously I missed that class or lesson at school, but it's worked out okay because now what people tell us is they say, we can't believe how resilient you are to the AI disruption to software. Turns out hardware is very, very attractive right now because you can't vibe code atoms, right? You can't just summon them into existence. And so interestingly, I think for Aura steering the way we have, and having always been a hardware company with a very strong software backing, it's actually been really advantageous. And investors look at us and they say, good, we're so glad that you're not in the software space and that

[Bloomberg Host]

you're a hardware provider and you've just been luring more investment and you've got a bigger market cap on the private side. I'm interested as to whether there's any inflationary pressures. Your investors are worried about how you think about manufacturing in this age of supply chain. We think about Hormuz, we think about China today.

[Tom Hale]

Yeah, I don't think we've really had seen the impact of inflation on demand, which is good. We've certainly seen some inflation impacts on kind of supply chain, but nothing material. And interestingly, last year, of course, there was all this drama about tariffs. And I think as a company, we were quite lucky one. We actually announced an intention to have a factory built in the US and so that's actually one really interesting outcome of that. It's just underway. We'll let you know when it's all rolled out. But at the same time, I think we also were able to, because we manufacture around the globe, be very careful to sort of manage the tariff issues very effectively.

[Bloomberg Host]

Tom Howe could speak to you for much longer. CEO of Aura. Fascinating to catch up. We hand it back to you from the Consolidation Spark Summit here in Napa Valley.

[Mark Gurman]

Okay, more interviews to come out of the Spark Summit throughout the afternoon. Tune in for a conversation with Open Air CFO Sarah Fryer. 8:30pm PM Eastern, 5:30pm Pacific. Elon Musk is taking Grok to Wall Street. Sources tell Bloomberg that heavyweights like Morgan Stanley and Apollo are testing Xi's group chatbot. As Space X, now parent of Xi, prepares for an ipo. Bloomberg's Common Arroyo breaks the story wide open. No surprise that you wake up. It's one of most read stories on the Bloomberg Terminal and bloomberg.com there's so much detail in the report about the XI strategy. The players involved. Give us as much of that detail as you can.

[Common Arroyo]

Sure. Thanks for having me. Basically, Xi is trying to boost their corporate client roster ahead of the ipo. And John Shulkin, who's been the chief revenue officer at the company, has been really driving this strategy. In order to to do that, they've mainly gone to Wall street clients that have previously worked with Musk companies before. Among them is Apollo, which helped finance access to chips. It's Morgan Stanley, which is one of the go to banks that has worked with Musk for years. And it's also Valor Equity, which is a venture capital firm that has backed Musk companies for a long time. They're testing Grok and they're using it alongside other AI models. But this is happening while like, you know, anthropic and open air really trying to fight for the same piece of the pie. So the adoption is going very slowly.

[Mark Gurman]

No. So one real quick interesting thing is that actually in your reporting, they're not using it necessarily for work. Is that right? Like on desk work in those firms,

[Common Arroyo]

they're trying to adopt it and use it along other models. But the chat bot has been falling behind on coding and financial implementation, which is why Xi is trying to like really ramp that effort up. And they've been trying to move more stuff internally to work on training Rock for financial modeling and like boosting also like the sales team. So they're trying to really prepare the chat bot for that use case, but it's not really being ready for it yet.

[Mark Gurman]

Also reporting that John Schulking stepping back as chief revenue officer, of course a partner at Valor now an advisor re common story boomers coming. Arroyo, thank you very much. All right, coming up on the program, Alphabet is taking the race to the global bond market. We're going to discuss that next. This is Bloomberg Tech. Time now for talking tech. And first up, Hon Hai, also known as Fox. Foxconn reported a 19% jump in quarterly profit, says the US will gradually become the company's largest AI server production hub. Companies become a key AI hardware player by assembling servers that house in video accelerators. Plus, China's tech leaders are facing a reality check. Alibaba narrowly missed revenue targets this morning as E commerce wars blunted its cloud surge, while Tencent reported its slowest growth growth in over a year. And ad tech is eyeing a potential $4 billion debut in Hong Kong. The optical connectivity specialist is reportedly seeking to raise at least $500 million or more at a valuation of 3 to 4 billion dollars, according to sources. Big story on the terminal. Alphabet is taking the race to the global bond market after a blockbuster $17 billion sale at home. The Google single parents now tapping the Japanese yen market for the first time. Bloomberg's Tassos Vosos joins us to explain big tech's move into what is international debt rights. That's the evolution here. Looking at international markets outside of its home. Why?

[Tassos Vossos]

Well, at some point you have to, if you, if you look at issuance this year, for example, non financial corporates in the US which is the deepest biggest credit market the world, 40 cents out of every dollar that was raised came from the tech sector, which is rather large. So you have to think in order to avoid saturating even the biggest market in the world. You actually have to look at every corner out there. So hyperscalers in particular Alphabet but also Amazon have taken steps to diversify that so they've tapped every, every big market they can imagine. So it's been euros, pound sterling, it's been Swiss francs and now with looking at the yen market so it's pretty much a global race in order to finance this massive capex spending that we're going to see in the next few years.

[Mark Gurman]

Right. And then in the euro bond market we're talking about the second biggest credit market. Why is it different this time around? Tessos like we've done a lot of breaking news on this show in corporate bonds. Is there something new here?

[Tassos Vossos]

There is actually and we've had megadeals in the past where you have tens of billions of dollars being issued in a single day. The problem, the difference with that is that that was a one off. Usually it's on the back of M and A. You have to raise massive amounts of cash in order to do that. Once you've done that then you can just absorb the company you've just bought. The difference here is that because capex spending is going to be so large in the next few years, hundreds of billions of dollars you have massive deal after massive deal which is a conundrum that invests investors are facing, they want to be involved in them but the main issue is that another massive deal is just around the corner. So the previous one is going to weaken, weaken the back of that. So that that trend of big deal after big deal is something that we haven't seen before.

[Mark Gurman]

Right?

[Tassos Vossos]

Pretty much in the history of the credit market.

[Mark Gurman]

Bloomberg's Tesla fossils. Thank you very much. Let's get back to Cisco before we leave today. Today's big number, $9 billion. That's how much the company expects index to get in orders from Hyperscalers in calendar 26 up from previous $5 billion target suggests this company's shift is showing a payoff. Right Cisco, welcome to the AI party. That's part of the story and the shares really reflecting that we're up 15% on track for the best day for Cisco since 2011. At the Open, 17% gain put them on track for their best day since 2002. Networking, routers, switches, cables make those components. The story again, wonderful. That does it for this edition of Bloomberg Tech. Standing by for Cerebras to start trading priced at 185 for its IPO indicated to open $350 per share. Check out the podcast. A stunning show. To recap, Apple, Spotify, Iheart and on Bloomberg this is Bloomberg Tech.

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