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

The rise of NVIDIA has fueled renewed investor interest in AI chip startups. One of them, Blaize, which was founded by former Intel engineers, is scheduled to go public on the NASDAQ on Tuesday as part of a SPAC deal, they announced Monday.

Launched in 2011, Blaize has raised $335 million from investors like Samsung and Mercedes-Benz. Headquartered in El Dorado Hills, California, it is focused on manufacturing AI chips for edge applications. Instead of being mostly used in huge data centers (like NVIDIA’s), its chips are intended to be integrated into smart products like security cameras, drones and industrial robots.

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

Blaize is currently a small player in the massive AI chip industry and is highly unprofitable, losing $87.5 million on just $3.8 million in revenue in 2023, the most recent year available for its financials, according to your prospectus. However, chip makers require a lot of capital to build their manufacturing (which Blaize says is done in the US) before they can really start to scale.

“As you can imagine, [as a] a chip company, you invest a huge amount, and when the hockey stick comes, it goes up,” Munagala told TechCrunch.

Blaize also touts $400 million in contracts in the pipeline. One deal in the investor deck touts a signed purchase order worth up to $104 million with an unnamed EMEA “defense entity,” possibly in the Middle East, for a system that can identify unknown or friendly troops, spot small ships and detect drones. (Munagala declined to say exactly which country it was.)

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, the closely watched AI chipmaker that filed for an IPO last fall and was looking to double its $4 billion valuationTechCrunch previously reported. However, Cerebras has not yet gone public because some investors were concerned about over-reliance on a single buyer from the Middle East, investors told CNBC.

But unlike Blaize, Cerebras focuses on data center chips. Blaize’s IPO is ultimately a bet on a future where AI chips move out of those centralized data centers and into greater integration into physical products.

“All the AI ​​hype is happening in the data center. Interestingly, they completely ignored and forgot about the real physical world use cases that are very real, that touch people’s lives and are happening right now and making money,” Munagala told TechCrunch. “We are focused on the practical use of artificial intelligence in the physical world.”