Nvidia’s recent surge has rejuvenated investor interest in startups that could be the next wave of potential builders of AI chips. Among more recent entrants is Blaize, a company founded by former Intel engineers that has said it will go public as soon as possible through a SPAC merger.
On Blaize and the Market for Edge AI Chips
Blaize, which was founded in 2011, has raised about $335 million from major investors including Samsung and Mercedes-Benz. El Dorado Hills, California-based the company designs AI chips for edge computing use cases. Blaize isn’t looking to build chips like Nvidia focused on massive data centers, but rather work to integrate its own into smart devices like security cameras, drones and industrial robots.
Leadership and Strategic Vision
CEO Dinakar Munagala, who worked at Intel for close to 12 years, also explains the significance of AI-driven edge computing. He says that the fast, low-energy edge AI is beneficial-development has been partly driven by mobile computing customers who want products for smaller devices-that also happens to be cheaper and better for privacy (his fanaticism about privacy is hard to overstate), all factors he believes will shape the future of AI hardware.
Financial Status and Market Position
Blaize is a small player in the competitive AI chip industry and it isn’t yet profitable, despite its innovative take. In 2023, it reported a loss of $87.5 million on revenues of only $3.8 million, the company said in its prospectus. But large-scale manufacturing requires heavy capital investment, which is mostly situated in U.S.-based facilities.
Upcoming Deals and Strategic Opportunities
Blaize says it has around $400 million worth of deals in the pipeline. One interesting contract is a purchase order of up to $104 million with an undisclosed defense agency in Europe, presumably the Middle East. The system is intended for military use, including troop identification, drone detection and monitoring of the seas, while details per country are classified.
Future Prospects and Market Valuation
Munagala projects that Blaize will be valued at roughly $1.2 billion after its SPAC merger. That valuation is a discount to recent private market estimates of other AI chip companies, such as Cerebras, which recently filed for an I.P.O. and sought to double its valuation of more than $4 billion. Yet fears about Cerebras relying on a single client in the Middle East have kept some investors wary.
The Increasing Importance of AI Chips in Edge and Data Center Markets
And while Cerebras is concentrating on AI chips for data centers, Blaize’s choice to go public underlines that the industry’s shift towards deploying AI hardware from centralized data centers down into embedded products and physical offerings extends beyond just ‘AI in a box’, this trend is driven by the realization that the AI breakthrough is thanks to a new age of AI.
