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The rise of NVIDIA has spurred renewed investor interest in AI chip startups. One of them, Blaize, founded by former Intel engineers, is set to go public on NASDAQ in a SPAC deal on Tuesday, it announced on Monday.
Founded in 2010, Blaize has raised $335 million from investors like Samsung and Mercedes-Benz. Headquartered in El Dorado Hills, California, it focuses on manufacturing AI chips for edge applications. Rather than being mostly used in vast data centers (like NVIDIA’s), its chips are meant 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 advantages,” CEO Dinakar Munagala, who previously worked almost 12 years for Intel, said in a statement to TechCrunch.
Blaize is currently a small player in the mammoth AI chip industry and is highly unprofitable, losing $87.5 million on only $3.8m in revenue in 2023, the most recently available year for its financials, according to its prospectus. However, chip manufacturers require loads of capital to build out their manufacturing (which Blaize says is done in the US) before they can start truly scaling.
“As you can imagine, [as a] chip company you do a massive amount of investment and when the hockey stick comes, it climbs,” Munagala told TechCrunch.
Blaize is also touting $400 million in deals in the pipeline. One deal in its investor deck promotes a signed purchase order of up to $104 million with an unnamed EMEA “defense entity,” likely in the Middle East, for a system that can identify unknown or friendly troops, spot small boats, and detect drones. (Munagala declined to say exactly which country.)
Munagala told TechCrunch he expects Blaize to be worth $1.2 billion after its SPAC merger. That is lower than private valuations for other companies like Cerebras, a closely-watched AI chipmaker which filed for an IPO last fall and was seeking to double its $4 billion valuation, TechCrunch previously reported. However, Cerebras has not yet gone public, as some investors had qualms over its over-reliance on a single Middle Eastern customer, investors told CNBC.
In contrast to Blaize, though, Cerebras focuses on data center chips. Blaize’s IPO is ultimately a bet on a future where AI chips move from those centralized data centers to being more integrated into physical products.
“All of the AI hype is happening in the data center. Interestingly, they’ve totally neglected and forgotten about real physical world use cases that are very real, that are touching people’s lives and are happening now and making money,” Munagala told TechCrunch. “We’re focused on the practical use of AI in the physical world.”
Charles Rollet is a senior reporter at TechCrunch. His investigative reporting has led to U.S. government sanctions against four tech companies, including China’s largest AI firm. Prior to joining TechCrunch, Charles covered the surveillance industry for IPVM. Charles is based in San Francisco, where he enjoys hiking with his dogs. You can contact Charles securely on Signal at charlesrollet.12 or +1-628-282-2811.
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