OpenAI has agreed to purchase up to 750 megawatts of computing power over the next 3 years from AI chipmaker Cerebras, as the ChatGPT maker looks to stay ahead in the intensifying artificial intelligence race and meet rising demand. The two companies announced the development on Wednesday.
The agreement is valued at more than $10 billion over the duration of the contract, according to a source familiar with the matter. OpenAI plans to use systems built by Cerebras to power its chatbot and other AI products. This marks the latest in a series of multi-billion-dollar infrastructure deals signed by OpenAI.
Cerebras Chief Executive Andrew Feldman said discussions began in August last year after the company demonstrated that OpenAI’s open-source models could run more efficiently on Cerebras chips compared with traditional GPUs. Following months of negotiations, the companies reached an agreement under which Cerebras will provide cloud services powered by its chips to OpenAI. These services will focus on inference and reasoning models, which typically take time to process before generating responses.
As part of the deal, Cerebras will build or lease data centres filled with its proprietary chips. OpenAI will pay to use Cerebras’ cloud services to run inference workloads for its AI offerings. The computing capacity will be brought online in multiple phases through 2028.
“Integrating Cerebras into our mix of compute solutions is all about making our AI respond much faster,” OpenAI said in a post on its website.
The deal highlights the industry’s growing demand for computing power to support inference, the process through which AI models respond to user queries. Companies are racing to develop advanced reasoning models and applications to drive wider adoption.
The partnership is also significant for Cerebras as it prepares for a public listing. The agreement is expected to help the company diversify revenue away from a UAE-based technology firm that has been both an investor and a major customer.
Founded in 2015, Cerebras is known for its wafer-scale engine chips designed to speed up training and inference for large AI models. It competes with Nvidia and other AI chipmakers. Sam Altman, CEO of OpenAI, is an early investor in Cerebras.
A global news agency reported last month that Cerebras is preparing to file for an initial public offering, targeting a listing in the 2nd quarter of this year. This will be the company’s second attempt at going public after filing for an IPO in 2024 and later withdrawing the plan in October.
OpenAI is also laying the groundwork for its own IPO, which could value the company at up to $1 trillion, according to earlier reports. Altman had said last year that OpenAI plans to spend $1.4 trillion to build 30 gigawatts of computing capacity, enough to power around 25 million U.S. homes.
Despite soaring investments and valuations, some investors and experts have warned that the sector could be heading towards a bubble similar to the dotcom era.
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