Google’s Big AI Test Comes Next Week

**Nathaniel Whittemore** (0:01)
Today on The AI Daily Brief, the significance of Codex coming to ChatGPT mobile, the difference between consumer and work AI, and what to expect from Google's IO event next week.
Before that in the headlines, a heck of a first day for Cerebras on Wall Street. The AI Daily Brief is a daily podcast and video about the most important news and discussions in AI.
All right, friends, quick announcements before we dive in. First of all, check out our careers page. I am hiring a full-time growth engineer that is someone who is engineering growth, not a developer by training necessarily, although you will be building lots, but it is a very cool way to be a part of this ecosystem. One final note, Enterprise Claw Cohort 3 is currently enrolling. You can find out about that either from our website or at enterpriseclaw.ai.
Today we kick off with a follow-up of a story that we have been watching this week, which is the public market debut of Cerebras. TLDR, the company delivered a massive first day of trading, kicking off a potentially significant IPO season for AI companies. Now heading into the big day, Cerebras had upsized their share offering, raised their price, and still after all of that ended up pricing the sale above their guided range. Red hot demand during the private roadshow flowed through into public markets on Thursday, with the opening trade seeing the stock double in price before settling into a 68 percent gain at the end of trading. Cerebras began the day as a $40 billion company, touched $100 billion for a minute, and now has a market cap of $66 billion. Now predictably for a frothy IPO, and I think that is a certainly reasonable frame, the launch brought out a fair number of contrarians on the stock. CNBC's Jim Cramer warned his audience to tread carefully, arguing that the price had detached from fundamentals. While there might be a situation in the future where I can recommend Cerebras, he said, I just can't even come close to justifying the valuation up here given how much it's already run right out of the gate. For now I say keep your bat on your shoulder and hope the stock gives you a giant pullback because at these levels it's too rich for me.
Meanwhile, General Intelligence's Andrew Picconelli was one of many declaring, quote, the Cerebras IPO may be the top. CNBC reported that there were 45 buyers for every seller of the stock, with Paki McCormick tongue-in-cheek arguing that the same is true for Cerebras' product, posting, once again, you people don't understand infinites. If inference demand is infinite, Cerebras at $400 is ridiculously cheap. Infinity times their inference market share equals infinity.
Now, obviously, any time you see this much intense demand for a single issue, it's worthy of some amount of skepticism, however. It sets up a pretty interesting dynamic for the mega-IPOs coming down the pike. SpaceX is expected to finalize their paperwork next week, so they could go live by the end of the month. Then we have Anthropic and OpenAI rumored to be lining up their IPOs by the end of the year. Investor Kip Harriage suggested we shouldn't overthink it, writing, If you're bearish on this market, just as we are entering the IPO boom phase, good luck to you. You're gonna need it.
This is one of those moments where anytime you see anyone arguing about the fundamentals, it kind of feels divorced from the reality of the moment, which is that fundamentals don't matter if everyone is bidding AI and everyone right now is bidding AI. For what it's worth, this is also why I think a lot of the discussion around the OpenAI versus Anthropic IPO is just a little preposterous, like there isn't going to be absolutely infinite demand for both of those stocks.
Couple more stories staying in markets. Figma is the latest software company to come back from the dead on the back of strong AI revenue. Figma was one big victim of the SaaSpocalypse narrative, seeing their stock down as much as 50% this year. However, like Atlassian before them, the addition of AI features seems to have put them back on the right course. During Thursday night's earnings, Figma reported that revenue grew at a 46% pace in the past quarter, accelerating from 40% in the previous quarter. Figma credited their AI features with CFO Pravi Malwani stating, You can't dismiss the significance of new tools. Figma is one of those companies where, as the AI has gotten better, so is our pitch for customers. Now, an interesting nugget given the themes that we've been exploring around the end of the AI subsidy era, in early March, Figma introduced a usage cap and started charging for token use above a limit. They said that the change hasn't made a dent in retention, noting that 75% of customers are still using their AI features, either sticking within the cap or paying for additional use. Whatever the combination of reasons, the market now seems to believe in the SaaS recovery, sending the stock up 8% in after-hours trading.