Cerebras IPO pops 108%, signals AI hardware's market comeback

AI chip shortages are creating acute pressure on startups building proprietary models, forcing founders to negotiate constantly with cloud providers for GPU access. Evan Morikawa of Generalist, which trains AI models for robotics, recently contacted 17 different providers to secure compute capacity. The scarcity has made GPU pricing and availability a critical business variable for model-training startups with limited funding.

Nvidia-backed cloud compute firms CoreWeave and Nebius are capitalizing on surging demand for AI chip capacity by raising prices sharply. Nebius held its first computing capacity auction in Q2 with Blackwell chip prices 15% above previous highs, and is now selling capacity closer to delivery dates to exploit price volatility. The trend reflects intense competition for limited Nvidia GPU supply among AI companies.

Cisco Systems reported strong fourth quarter revenue growth driven by cloud providers increasing spending on AI networking chips and switches, yet shares fell 5% following the earnings announcement. The decline suggests investor concerns about valuation or forward guidance despite the positive demand signals from major cloud customers. The company's AI networking portfolio is becoming a material revenue driver as cloud infrastructure providers scale AI deployments.

LTX released LTX-2.5, an open-weights video generation model that produces 10-second clips in 6.8 seconds on Nvidia GB200 chips, with native multishot support and improved quality. The model is available free for organizations under $10 million ARR on Hugging Face, ComfyUI, and via API. LTX claims 33 million downloads across its model family and reports a 67% win rate in blind quality tests against competing models.