EP 181: Cerebras Earnings, QCOM Investor Day, Micron Earnings and the Memory Mafia

**Ben Bajarin** (0:05)
Hello everyone, welcome to another episode of The Circuit. I am Ben Beharron.

**Jay Goldberg** (0:11)
Greetings programs, I'm Jay Goldberg.

**Ben Bajarin** (0:15)
Well, this week was an up and down week. One of the downs was the tech industry learned that Om Malik, a long time staple in the tech industry, are arguably one of the earliest bloggers and probably the most influential of bloggers. Kind of, I think the whole blogging thing happened largely because of Om and his popularity. He passed away on Wednesday of heart complications.
And everybody's been sharing some of their stories on Twitter. I've known Om for a while, saw him every year at multiple Apple events. He was always extremely kind, very, very generous. He mentored countless of top-tier tech media.
And was just an overall great dude.

**Jay Goldberg** (1:14)
Yeah. So I just want to send, we want to send our condolences out to his family and loved ones. Om was an important part of the industry. I read his site Giga Om religiously every day for years, and tried to think and write like him, and he'll be missed.
And he was one of the first and one of the most important influences on how we conduct tech journalism and tech writing today.

**Ben Bajarin** (1:39)
Yeah. And if you aren't familiar with Om, I encourage you to do a search for him on Twitter. You'll see everybody sharing stories. And even some of the blog stuff, he's been pretty active off Twitter, but he's written some good essays. He was also a columnist in The New Yorker, which I always was like, how do you help me get a column in The New Yorker? He was like, I could put your name in, but he was like the only tech actual journalist with a column in New Yorker. It was pretty epic. So anyway, sad news, but great legacy that he left. I know everybody was appreciated the impact he's made on their lives and the tech industry. So yes, many thoughts go out to his family.
Okay. This week, earnings wise, we're going to go in chronological order. There was a very keen interest on Cerebras' first as a public company. I will say I was on the road. I saw snippets of obviously the earnings release, but really the conference call.
But I'll let you unpack it, Jay, and we can talk a little bit about the position that Cerebras is in. They got a little bit of good news with the launch or the tease of OpenAI 5.6, which they're running a just shy of 2 trillion parameter model on Cerebras at higher token costs, so premium tokens, but that's happening. So anyway, I'll let you give the spiel, the quick spiel.

**Jay Goldberg** (3:14)
Yeah, so they reported an earning, and this is the first earnings as a public company. And it was one of those prints that was, if you just read it, as it came across the wire, everything looked fine. But fine is not enough in today's world.
And I think the chief concern was around their margins. Lots of questions about their margins. Cerebras, of course, has this very, I won't say very, it has a unique architecture. Like, they don't produce chips, they produce entire wafers that operate as a single chip, wafer scale engine, they call it. And there's lots of questions about how that works and how you package it up. And it looks like it is very expensive to package because their gross margins were not where they should be. Lot of complexity there, not quite clear what happened.
But the street didn't like their margins. They of course just went public a few months ago and it was very well received. And I will say that your first two quarters as a public company are incredibly important to get right because you've brought in a new group of shareholders who don't know you the way your venture backers do. Even if some of your venture backers were themselves public funds, you usually have a different set of fund managers you're working with. And you need to work really hard to establish credibility. And something got lost in communication there. And so, it's going to be a little bit of a struggle for them. They need to sort of amp up their investor relations work in the next quarter. They can turn it around, but there's a lot of questions about this, right? There's a lot of moving parts there. I think they felt they did really well. They have big deals with OpenAI and AWS. Those are coming on stream. They say that they're having so much demand that they're having to go back to their previous customers to rent out capacity that they rented to somebody else or they sold to somebody else and they're having to rent it back. And so, that's part of the problem with their gross margins.