AI Chipmaker Cerebras Systems Seeks $4.8 Billion in Upsized IPO

0:00Scarlet Fu:Is your multi-entity management creating more confusion than clarity? You need the Intuit ERP. Intuit Enterprise Suite. It's the AI-native ERP solution that's powerful, painless, and proven. Learn more at intuit.com slash ERP. So there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now, a global workforce of 300 ,000 can use AI to fill their HR questions, resolving 94 % of common questions. Not noise. Proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business.

0:41Let's create smarter business. IBM.

0:44Scarlet Fu:You need to make a huge presentation in an hour. Adobe Acrobat uses AI to take all your documents and generate a presentation with a single click. Build slides quickly and streamline the process. Need a last-minute pitch deck? Do that with Acrobat. Need to level up your presentation design? Do that with Acrobat. You have 30-plus documents that need to be simplified into a proposal. Do that. Do that. Do that with Acrobat. Learn more at adobe.com slash do that with Acrobat. Bloomberg Audio Studios. Podcasts. Radio. News. you're listening to the bloomberg intelligence podcast catch us live weekdays at 10 a.m eastern on apple carplay and android auto with the bloomberg business app listen on demand wherever you get your podcasts or watch us live on youtube bloomberg's carmen reineke carmen's going to stay with us because she wrote a very cool story on yet another monster ipo that is you guessed it oversubscribed.

1:52Carmen, talk to us about which deal you're looking at here. Yeah. So we're looking at Cerebra Systems. So the thing that's interesting here, so it's an artificial intelligence chip maker, data center operator. Obviously, all the rage right now, we're seeing so much demand for these kinds of companies. The company has upsized its initial public offering. So it's now looking to raise nearly$5 billion. This is at a few. So we had reported previously, they had a different price that they were seeking. And this company also had applied for an IPO a few months ago and withdrawn that listing. And so they're back to the public market here.

2:32But yeah, really significant. It's expected to price later this week. So we'll be watching for that day as well, as well as the launch of China. What is unusual here is just the IPO price itself. Why is it so high? Initially, it was 115 to 125. You don't see that very often. I know. Well, now we're seeing$150 to$160 each. I mean, I think there's just so much demand in this category, right? Especially we're in this huge build-out. We need data centers. There's a chip shortage. So investors are really clamoring for more ways to play the AI trade.

3:03Scarlet Fu:I guess they don't need to make sure the price is low because of what they do. They're an AI chip maker. So if you want it, you've got to pay up. Yeah, but it used to be, again, back in the day, you'd want to sell 20 % to 25 % of the deal to retail. In retail, it's a lot easier to buy a$20 stock or$25 stock just intuitively versus this. Now, but in today's day and age, you can buy fractional shares. And that's how that gets done, I guess. I mean, when Bitcoin's at$80 ,000, you think of that as kind of the dividing line than like an IPO at$125,$130. Okay. It's part of it. This is going to be a good deal.

3:35I mean, boy, to be an IPO banker this year is going to be just ripping. All right. This deal is being led by Morgan Stanley, Citigroup, Barclays, and UBS. So pretty good.

3:43Scarlet Fu:They're getting paid. Yep. All right. All right. Thank you so much, Carmen Reineke, with the latest on our stock boomers, as well as this upcoming IPO. Stay with us. More from Bloomberg Intelligence coming up after this. If your finance team spends more time finding data than using it, if there's one entity here and one here and one here and one here, if scaling your business feels like starting over, you need the Intuit ERP. Intuit Enterprise Suite is the AI-native ERP solution that's powerful, painless, and proven. Learn more at intuit.com slash ERP. Support for the show comes from Public. Lately, it feels like there are two types of investing platforms.

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5:37Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business, IBM.

5:49Scarlet Fu:You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. Scarlett Fu and Paul Sweeney live here in our Bloomberg Interactive Broker Studio streaming live on YouTube as well. Well, Jerome Powell's term as Federal Reserve chair ends on May 15th. He will, however, remain a member of the Board of Governors until January 31st, 2028. Much to the chagrin of President Donald Trump here. And that is the subject of our big take story on the Bloomberg Terminal today.

6:27Katerina Sarajeva, Federal Reserve reporter for Bloomberg News. She joins us from our Houston bureau. Katerina, changes taking place at the Federal Reserve. Fed Chairman Jay Powell stepping down. What is his legacy going to be, do you believe? Yeah, I mean, it's really interesting, right, because he's had a jam-packed eight years as chair. We've seen a global pandemic and, you know, all that that did to the economy. We saw the run-up in inflation after that. And I think in any kind of normal time, that would have been his legacy, his response to the pandemic, but also kind of the Fed's delay in raising rates to combat that high inflation.

7:09But now, you know, I think a lot of people are looking to what's currently going on between the Fed chair and the president as perhaps really marking Chair Powell's legacy. And that's kind of this battle to keep the Fed independent.

7:27Scarlet Fu:How do you anticipate Jay Powell to behave as a Fed board member but not the Fed chair? Because he's going to stay on in his role as a member of the board, even as he hands Reins as Fed chair over to Kevin Warsh. Yeah, that's right. And it's an unusual step. We've only ever seen this once before in history, and that was in the late 40s, early 50s. So it's been a long time. We don't really have a blueprint for this. But what he has said, Chair Powell himself, is that he will take a very kind of low-key approach to this. He won't be, you know, we won't be hearing from him a lot. He won't be trying to act as kind of a shadow chair or anything like that.

8:12So it really does seem like he wants to kind of fade into the background a little bit, obviously do his job as a governor, but not be too out in the open about it. Really let the new chair kind of take over. So, Katerina, I'm sure President Trump would like to see Jerome Powell just off the Fed altogether. But presumably that would take some greater reassurance that Mr. Powell would not have legal liability in the future. Are we anywhere along those discussions? Are those discussions even being had? Yeah, I mean, I think you're right about that. And also, I think he wants to see some or have some sort of assurance that the Fed itself also won't be that there won't be further legal attacks against it.

8:57So, you know, that would be like the administration trying to fire someone else at the Fed. So, I mean, we have a couple things happening right now. there is an internal investigation going on that the Fed is now conducting itself into this, the Powell's testimony last year before Congress. This was the reason why we had the DOJ investigation in the fall and winter, why we had these subpoenas against Powell. This is what started this whole criminal process against him. That has been passed along to the Fed. So at some point, will get a report on that. And they can make criminal recommendations to the DOJ if they see fit.

9:40So I think he'll want to see that through. And then we're also waiting on a Supreme Court decision about Governor Lisa Cook, who Trump tried to fire last year. So I think he will also want to kind of see that, I'm guessing. So there's a few different things kind of hanging in the air still.

10:00Scarlet Fu:When it comes to Powell's legacy, I think about how Ben Bernanke, his predecessor, created this precedent where there's a news conference after every decision as opposed to after certain decisions. What did Jay Powell do that kind of changed the way the Fed communicates with the public? Yeah, so Chair Bernanke started the press conferences, but they were just quarterly when he and when then Fed Chair Janet Yellen were doing them. Powell actually is the one that started doing them after every meeting. I see. Thank you. Yeah. So that's definitely kind of a communication legacy for him. And we'll see if that continues in the warship era.

10:43Yeah. In addition to sitting on the Fed board, has Mr. Powell said what he will do now that he steps down from the Fed chairmanship, is he going to do anything outside of the Fed? No. And they usually don't. I mean, that's a full-time job. They usually, you know, no one at the Fed, none of the Fed policymakers right now have other jobs or do anything else. That's their sole focus. So I wouldn't expect that from him. And honestly, even if he were to fully leave or whenever he does fully leave the Fed, I don't know if we'll see him do anything else. You know, He's in his 70s. He has grandchildren that he talks about frequently.

11:25So I don't know if I would expect him to do a lot even after he leaves the Fed.

11:32Scarlet Fu:Sounds like he's ready for retirement. As he stays on the Fed board but is no longer chair, is he going to be a prolific Fed speaker? If you go to EcoGo on the Bloomberg terminal, you can see which Fed governors or Fed officials will be speaking. Do we expect Jay Powell to do any of that? I don't think so, or not much. That's at least what he's indicated. He said, you know, we won't be hearing from him that much. So, I mean, I would expect maybe every once in a while a speech. And the governors do speak frequently, as you mentioned, so that is normal for them. But I think because he has, you know, this, he was or, you know, is the chair soon to be stepping down.

12:12But because he has that background, I think he'll want to be careful because it might come off as him trying to steer the committee or or kind of come back to that leadership role. Right. And he he definitely does not, you know, has said he doesn't want to be doing that. Kevin Warsh joining the committee Fed chair. What are the expectations now within, you know, Fed watchers about what he's going to do in his first days and weeks? Yeah, I mean, it's really interesting. He has spent a long time over the past few years. He's really written a lot about what he would like to change at the Fed and some of the things he would like to do.

12:55Everything from how the Fed communicates and to how it thinks about inflation, the kind of models it uses, even the Fed staff. So he's said a lot of these things, but we just don't know how quickly he's going to be able to implement some of these changes or how quickly he'll want to. I mean, I imagine that he'll probably want to kind of get a lay of the land. You know, he was a Fed governor, but 15 years ago at this point. Right. So a long time ago. So I imagine maybe in the first few weeks we won't see a lot of change yet. And then gradually, kind of over time, we'll start to see some things change.

13:35But we'll just have to see. We really don't know. We haven't gotten a lot of specifics from him about, you know, when he'll do the things he wants to do.

13:44Scarlet Fu:All right. Good stuff. Thank you so much. Katerina Sariva is our Bloomberg News Fed reporter joining us from Houston. And I guess that gets to the point, Paul, about how the Fed is a consensus-driven organization, institution. Is that by tradition or is that by, you know, by rules? Like, is that kind of written? I don't know. I am not sure. But I think it's you know, there's a oftentimes like to act with the union unanimous, have the unanimous votes. But now we're getting some dissenters and maybe we'll get more dissenters going forward. Yeah, that's certainly been the case over the last year.

14:16Scarlet Fu:The dissension, something that's normal at the Bank of England, less normal at the Fed. Stay with us. More from Bloomberg Intelligence coming up after this. Support for the show comes from Public. Public is an investing platform that offers access to stocks, options, bonds, and crypto. And they've also integrated AI with tools that can assist investors in building customized portfolios. One of these tools is called Generated Assets. It allows you to turn your ideas into investable indexes. So let's say you're interested in something specific like biotech companies with high R &D spend, small cap stocks with improving operating margins or the S &P 500 minus high debt companies.

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16:58Scarlet Fu:Chase for business. Make more of what's yours. The Chase mobile app is available for select mobile devices. Message and data rates may apply. JPMorgan Chase Bank N.A. Member FDIC. Copyright 2026. JPMorgan Chase and Company. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. We want to focus in on what's going on in the pharma space and especially, you know, with a potential change coming up at the head of the FDA.

17:38Scarlet Fu:Sam Vizzelli is our go to guy for all things pharma. He is our director of research for global industries and our senior pharmaceuticals analyst joining us right now from London. Sam, the issue at hand is the future of the FDA commissioner, Marty McCary. There's a lot of political tension, and I'm not sure if it's because there's clashing with RFK's Maha priorities or clashing with conservatives over things like the abortion pill access. But there's a lot of unrest in the FDA, and the reports are that President Trump will be replacing Marty McCary soon. What is the issue specifically from where you see it?

18:15Yeah, so, Scarlett, I mean, the FDA, since the change in administration and obviously the appointment of Robert Kennedy Jr. to HHS, which oversees some of this, has been in quite a bit of flux. the center for drug evaluation and research cedar which takes after drug approvals looks after drug approvals that head has changed the center for biologics evaluation and research which takes up to looks after vaccines and gene therapies etc got a new head uh vene prasad that head left or was fired which way it was and then he came back again and now he's going again so there's been a lot of flux so when you get flux and they fired i don't know 3 000 3 500 individuals.

19:03Maybe I don't have the exact number, but something in that sort of region. You know, this is a lot of old-time knowledge that's left the agency. Some refresh is pretty good, but all of this has happened under the

19:20caretakership of Marty McCary. And to all his sense and purposes, the folks I talk to say that he's a perfectly knowledgeable, wonderful man. I have friends on the buy side who say, to me that he's been very good to them. And then on the other hand, we hear all these issues and some biotechs having issues, etc. So I wouldn't be surprised if there's something happening here.

19:41Scarlet Fu:What has Marty McCary done well? I mean, I think about from a personal point of view, he's made estrogen patches more accessible for women who are suffering through menopause. And that's something he's written about in his book as well. What has he done that will kind of serve as his legacy if he does end up leaving? Well, I think what's been good is that he's much more available for us to hear from. Do you know what I mean? He does Twitter videos, sit-downs and discusses and brings ideas and wants to make animal testing less required. He wants to get drug development timelines shortened. They've done some deals with AstraZeneca and one of the pharma companies, Amgen, I think, to try and reduce the time of drug development, which gives pharma companies the ability to bring drugs faster to patients.

20:34What the problem is, is that there's been all this upheaval and issues with not knowing exactly what to expect, having had a deal with the FDA when you go back with your data and, you know, bringing some of these things into public conversation where it shouldn't have been done. So there's pluses and minuses here, unfortunately. And what the FDA now needs is a solid, good, solid pair of hands that just gets down to the business of looking at the safety and efficacy of drugs. Sam, when you talk to your pharma companies and biotech companies, is it harder to get stuff done today under this administration?

21:14Easier? About the same puts and takes? What's the overall view? Yeah, I would say puts and takes. It's a perfect phrase here because it depends who you talk to. It depends whether you talk to them in public or in private. If you talk to, you know, nobody wants to upset the agency because if you already have some trouble or some problem or some friction, why would you want to add to it? So if you look at what companies are saying publicly, everything's fine. But then companies go and say, well, you know, we've had this drug discussion with the FDA. This was what we were told to do. We did it. And now they say no.

21:46So there's some of that going on, which, of course, is reality. So I think it all depends on who you talk to, when you talk to them, in what setting. You know, I think that folks wouldn't mind the change here.