Blaize, a California-based AI chip startup founded by former Intel engineers, is set to make its public debut on Nasdaq through a SPAC merger on Tuesday. Move signals growing investor enthusiasm for companies aiming to carve out a niche in the rapidly expanding AI hardware market.
A Decade in Making
Founded in 2011, Blaize has raised $335 million from high-profile investors, including Samsung and Mercedes-Benz. Unlike industry giant Nvidia, whose chips primarily power massive data centers, Blaize specializes in AI chips designed for edge computing. Se chips are tailored for smart products such as drones, industrial robots, and security cameras, offering low power consumption, reduced latency, and enhanced data privacy.
“AI-powered edge computing is the future due to its low power consumption, low latency, cost-effectiveness, and data privacy advantages,” said Blaize CEO Dinakar Munagala, who spent nearly 12 years at Intel, in a statement to TechCrunch.
Financial Challenges and Growth Prospects
Blaize’s financials highlight the challenges of scaling in the semiconductor industry. The company reported a loss of $87.5 million against revenue of just $3.8 million in 2023. However, Munagala remains optimistic, pointing to the capital-intensive nature of chip manufacturing.
“As you can imagine, [as a] chip company you do a massive amount of investment, and when hockey stick comes, it climbs,” Munagala told TechCrunch.
The company is also banking on a robust pipeline, touting $400 million in potential deals, including a $104 million purchase order from an undisclosed EMEA defense client. This system is expected to enhance military capabilities by identifying friendly troops, detecting drones, and spotting small boats.
Valuation and Market Position
Following the SPAC merger, Blaize is projected to be valued at $1.2 billion—modest compared to AI chip startups like Cerebras. Cerebras, known for its focus on data center chips, has been seeking to double its $4 billion valuation ahead of its IPO. However, its reliance on a single Middle Eastern customer has raised concerns among investors.
In contrast, Blaize aims to differentiate itself by targeting edge computing applications, a market it views as largely untapped but ripe for growth.
“All of the AI hype is happening in data centers. Interestingly, you’ve 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 said.
A New Era for AI Chips
Blaize’s public debut underscores a broader trend in the AI chip industry: a shift from centralized data centers to decentralized, edge-based solutions. If successful, Blaize could position itself as a leader in enabling AI-powered products that directly impact everyday life.
As the company takes its next steps on Nasdaq, it faces the dual challenge of proving its business model while navigating a highly competitive semiconductor market. The outcome could shape how investors view the future of AI chip innovation beyond data centers.
