A new player is entering the AI chip market, as Blaize, a startup founded by former Intel engineers, is set to go public on the NASDAQ in a Special Purpose Acquisition Company (SPAC) deal on Tuesday. This move comes amidst renewed investor interest in AI chip startups, sparked by the rise of NVIDIA.

Blaize, headquartered in El Dorado Hills, California, has raised $335 million from investors like Samsung and Mercedes-Benz since its founding in 2010. The company focuses on manufacturing AI chips for edge applications, which are designed to be integrated into smart products such as security cameras, drones, and industrial robots. This approach differs from NVIDIA's focus on data center chips.

According to CEO Dinakar Munagala, who previously worked at Intel for almost 12 years, "AI-powered edge computing is the future due to its low power consumption, low latency, cost-effectiveness, and data privacy advantages." This sentiment is reflected in Blaize's business strategy, which prioritizes the development of AI chips for edge applications.

Despite being a small player in the AI chip industry and currently unprofitable, with a loss of $87.5 million on only $3.8 million in revenue in 2023, Blaize is confident in its future prospects. The company requires significant capital investment to build out its manufacturing capabilities, which are based in the US. Munagala notes that "as you can imagine, [as a] chip company you do a massive amount of investment and when the hockey stick comes, it climbs."

Blaize is also touting $400 million in deals in the pipeline, including a signed purchase order of up to $104 million with an unnamed EMEA "defense entity" for a system that can identify unknown or friendly troops, spot small boats, and detect drones. While the exact country involved was not disclosed, this deal highlights the potential of Blaize's technology in various industries.

In contrast to Blaize, other AI chip startups like Cerebras focus on data center chips. Cerebras filed for an IPO last fall, seeking to double its $4 billion valuation, but has not yet gone public due to investor concerns over its reliance on a single Middle Eastern customer. Blaize's IPO, on the other hand, is a bet on a future where AI chips move from centralized data centers to being more integrated into physical products.

Munagala emphasizes the practical use of AI in the physical world, stating that "all of the AI hype is happening in the data center. Interestingly, they've totally 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." Blaize's focus on edge computing reflects this vision, with the company expecting to be worth $1.2 billion after its SPAC merger.

The successful listing of Blaize on the NASDAQ will be a significant milestone for the AI chip industry, as it demonstrates the growing interest in edge computing and the potential for startups to make a meaningful impact in this space. As the industry continues to evolve, it will be interesting to see how Blaize's focus on practical AI applications in the physical world shapes the future of edge computing.