Cerebras Systems’ stock experienced a sharp decline this week, dropping nearly 20% to hit its lowest level since the company's high-profile IPO in May 2026. The downturn was driven largely by news that Nvidia will support a critical component of OpenAI’s latest AI model, GPT-6.1 Sol’s “Ultrafast” mode, edging out Cerebras hardware. This development, coupled with the expiration of post-IPO lockup restrictions allowing insiders to sell shares, put significant downward pressure on the stock, which now trades at around $166.43.

Since its market debut, Cerebras shares have fallen over 50% from their initial surge, as investor enthusiasm cooled following the loss of a key inference workload to Nvidia. At its IPO, Cerebras was valued at about $95 billion but has now seen its market capitalization decline to just above $39 billion. Cerebras is known for its large, custom-built ASIC chips designed specifically for AI inference tasks, which it offers through data center cloud services. Earlier in 2026, the company had signed a major deal with OpenAI worth more than $10 billion to provide 750 megawatts of computing power through 2028.

The loss of the OpenAI inference contract represents a setback, especially as industry research predicts that inference workloads will become more dominant in AI data centers than training tasks by the end of the decade. At the same time, a significant number of insider shares—about 8% of total outstanding shares—became eligible for trading this week. Executives, including CEO Andrew Feldman and CTO Sean Lie, have already sold over $240 million in shares since late August, increasing the supply of stock on the market.

Despite the negative market response, OpenAI CEO Sam Altman clarified that Cerebras remains a close partner to OpenAI with ongoing collaboration focused on advancing computation speed. This statement helped stabilize the stock slightly, with shares gaining nearly 3% in extended trading on Friday. Nonetheless, Cerebras faces mounting challenges in maintaining its competitive edge against Nvidia and navigating the pressures of its post-IPO shareholder landscape.