AI: Public Markets root for AI & More. AI-RTZ #1088

Michael Parekh AI: Reset to Zero

24 hours ago

6 MIN READ

Cerebras (CBRS) IPO green lights 2026 mega-AI IPOs: Cerebras, an AI chip aspirant I’ve tracked for over a decade, finally had its bravura IPO debut yesterday. Priced at $185, trading up to $385, and closing above $300, the IPO rang all the bells of the Internet era IPOs. The differences this time were beefier if more concentrated revenues (Saudi Arabia), and a steep climb ahead securing AI compute, and diversified customers against market leader Nvidia. I’ve written more on the technical and business details in the link at the end here. But the broader point is that the offering theoretically underlines investor enthusiasm for mega-AI IPOs starting with SpaceX/xAI this June, and Anthropic and OpenAI later this year. Despite the small floats, six month lockups, and the special concessions by index funds to include the mega-IPOs within days after trading rather than the traditional year or more of seasoning. More here.

Chips see their AI Time in the Sun: Even before the Cerebras IPO, the public markets have been leaning into the semiconductor chips trade in this AI Tech Wave. With chip stocks outpacing the market average by 2x and more and Intel alone seeing a 200%+ move this year on its bid to be the poor man’s TSMC type fab company in the US. Especially after Elon Musk and Tim Cook nestled up for some possible deals. And of course Nvidia threw in a charitable few billion and a CPU ‘partnership’ contract. The point is that momentum oriented institutional and meme driven individual investors are leaning into the AI chip trade. Which fortunately has secular and fundamentals driven foundation for the bullishness. But like everything in momentum driven financial moves, be prepared for higher volatility on the slightest hints of a counter-narrative. Not financial advice as usual. More here.

Investors embracing AI FOMO: Investors are also leaning into the broader supply chain beyond chips on the AI Tech Wave trade. Corning with its fiber optics cables is a recent example. Complete with an Nvidia corporate strategic investment. This includes investments in Power of all stripes, critical inputs like rare earths, copper, helium, and a range of other inputs. Not to mention AI talent and other key ingredients globally to the new supply chains forming around and outside China. Again, all this markets a public market relatively deprived of direct investments on the private companies that have started to see their ‘product-market-fit’ in AI, especially on the AI Coding and Enterprise side. Microsoft is the one name that is down over 15% this year despite its OpenAI win (Stake worth over $200 billion), and Copilot driven enterprise revenues in the billions. It’s getting so that activist and opportunistic public market investors are building stakes in Microsoft for possible more focused AI efforts at the company. Expect more of the same in other hardware and software ‘laggards’ around the AI opportunity ahead. To the current fear of missing out (FOMO) AI enthusiasm. More here.

Jensen gets to go to China: Nvidia founder/CEO Jensen Huang had his ‘Home Alone’ moment earlier this week, with the US President picking him up in Air Force One in Alaska, to accompany him with 16 other US CEOs to China for meetings with President Xi. After seemingly forgetting to invite him in the first place. The trip generally seems to have gone well with the US green-lighting the sale of Nvidia China nerfed H200 AI chips, but with the Chinese government taking its time to approve the sale of those chips to its tech companies eager for them. Its geopolitical games continue, especially ahead of President Xi visiting the White House on September 24 this year. We’ll see which Chinese executives he chooses to invite or not on that trip. Expect Chinese EV, Robotics, and Drone executives at least, from BYD, Unitree and DJI, along with a hot of China’s open source AI leaders like DeepSeek, Manus (reclaimed back from Meta), Alibaba, Tencent and of course Bytedance. The AI geopolitical Kabuki theater will continue with at least two or three more trips ahead. Back and Forth. More here.

AI Companions see their ‘Product-Market-Fit’ (PMF): If coding is the big AI hit on the enterprise side, then AI Companions are the closest to an AI hit on the consumer side thus far. The big LLM AI companies like OpenAI and others are keen for market share reasons to offer ‘warmer’, friendlier AI chatbots and agents to consumers, buttressing AI compute usage of their mega billion AI Data Center investments. The data is showing resonance across demographic groups young and old for these ‘companionship’ offerings. Regulators are already poised for abuses at the younger end of the age spectrum, and at overselling mental wellness type promises at the older end of the age spectrum. The AI companies know well the propensity of humans to anthropomorphize and humanize AIs way ahead of their actual capabilities. So this is a tug of war that is just getting started. To be continued over years ahead. More here.

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