Cerebras Systems endured the worst week of its short life as a public company. The chipmaker's stock tumbled nearly 20% over the past week to its lowest point since the company's May debut on the Nasdaq, after reports emerged that Nvidia will power a key portion of OpenAI's latest AI model rather than Cerebras hardware — a blow compounded by an expiring lockup period that sent additional insider shares onto the market.
The stock closed Friday at $166.43, leaving Cerebras down more than 50% from the opening-day price that followed its May 14 IPO. The company's market capitalization now sits at just over $39 billion, a steep decline from the $95 billion valuation it carried on its first day of trading — a figure that placed it just short of the $100 billion club occupied by Meta, Alibaba, and SpaceX at their respective market debuts. For more context on this story, see our ongoing artificial intelligence updates.
The Report That Started the Sell-Off
The trigger came on Wednesday, when research firm SemiAnalysis posted on X that OpenAI will use Nvidia graphics processing units to power the "Ultrafast" mode of its GPT-6.1 Sol model — a workload that had been associated with Cerebras.
The association was no small matter. Cerebras rose to prominence among investors as the inference specialist behind OpenAI's Ultrafast tier, a collaboration announced in August when GPT-5.6 Sol was shown running at 750 tokens per second on Cerebras hardware with no quality loss. Ultrafast became the flagship demonstration of what Cerebras' wafer-scale chips could do for AI speed, and a central plank of the company's pitch as an alternative to Nvidia.
Losing a visible inference workload to Nvidia has raised questions about the scope of the OpenAI relationship, underscoring the competitive pressure Cerebras faces from the dominant chipmaker even though the partnership formally remains intact.
Altman's Reassurance Came After Hours
The stock did recover some ground after market close on Friday, rising nearly 3% in extended trading, after OpenAI CEO Sam Altman addressed what he called "speculation about our partnership with Cerebras."
"Cerebras is a close partner, and we have a deep engagement pushing on the frontiers of speed," Altman wrote in a post on X.
The statement suggests OpenAI wants to keep the relationship intact, but it stopped short of detailing which workloads run on which company's hardware — precisely the ambiguity that unnerved investors in the first place.
Lockup Expiration Poured Fuel on the Fire
The sell-off was not only about Nvidia. The expiration of post-IPO lockup restrictions released a wave of insider shares onto the market at the same moment.
According to the company's prospectus, up to 19.4 million shares — equal to 8% of total shares outstanding — held by directors, officers, non-executive employees, and non-employee holders unlocked on Wednesday. Before that, up to 14.6 million shares had already been released for sale every two weeks since August 19.
Insiders have been taking advantage. CEO Andrew Feldman and CTO Sean Lie, both of whom became billionaires through the IPO process, sold more than $240 million worth of Class A shares between August 20 and September 25 under trading plans adopted shortly after the company went public. Other executives have also sold shares valued in the millions.
What the January Deal Means Now
The stakes are considerable. In January, Cerebras struck a deal valued at over $10 billion with OpenAI to supply 750 megawatts of computing power through 2028 — the agreement that anchored the company's post-IPO narrative as the leading non-Nvidia option for AI compute.
Cerebras' business model makes the current uncertainty particularly pointed. The company makes large custom chips designed specifically for inference workloads, and it leases computing capacity from its own data centers as a cloud service. Inference is not a side business for Cerebras — it is the entire business.
The timing adds further weight. According to McKinsey, inference is expected to surpass training as the dominant workload in AI data centers by the end of the decade, making any perceived shift in that market especially consequential for a company whose economics depend on it.
What Investors Are Watching Next
With more lockup tranches likely to expire in the months ahead, and open questions remaining about how OpenAI will divide its inference workloads between Cerebras and Nvidia, investors are looking for formal clarification from either company about the terms and scope of their agreements.
Until then, the week's trading suggests how fragile the market's confidence in single-partner narratives can be. A research firm's post on social media was enough to erase billions in market value in days; a CEO's social media post was enough to win some of it back after hours. The underlying question — whether Cerebras can hold its place in OpenAI's compute stack against Nvidia's gravity — remains unanswered.
For a company that listed in May as one of the most valuable semiconductor debuts in history, the message from the market this week was blunt: being the alternative to Nvidia is only worth as much as the workloads that actually run on your chips.
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