Cerebras Systems Inc. CEO Andrew Feldman says renting out compute capacity is very profitable. Shares fell Thursday morning after the company projected slower growth than some investors anticipated. Earnings were released Wednesday. Feldman says he's proud of the results and speaks to Ed Ludlow on "Bloomberg Tech."
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What Andrew Feldman said
Written from the verified transcript and checked against it. Every figure links to the moment it was said.
Andrew Feldman, CEO of Cerebras Systems, discussed the company's Q2 earnings and its growing business of renting out compute capacity. He said the first-party cloud business, where Cerebras rents its own data center capacity, was up 281% year over year. He attributed the hardware business shortfall to customers lacking data centers and to warrants subtracted from GAAP revenue. Feldman highlighted a backlog of $25.4 billion and said revenue is expected to more than triple next year. He mentioned signing up 600MW of capacity with a pipeline of gigawatts. On supply chain, he cited partnerships with Flextronics, Sanmina, Rocket Arms, and TSMC, and said manufacturing capacity will increase more than tenfold this year. He addressed the stock drop and lockup expiry, focusing on long-term investors. Regarding AMD, he said engineering teams are working together and deployments are expected in Q4.
Key takeaways
First-party cloud business grew 281% year over year in Q2 2026.
Cerebras has $25.4 billion in backlog for hardware shipments.
Revenue expected to more than triple next year, with big guidance raises for 2027 and 2028.
Signed up or have live 600MW of capacity with a pipeline of gigawatts.
Numbers and commitments
Figure
What it refers to
Type
At
281%
Year-over-year growth in first-party cloud business
0:00Could you give me a backstory on that, Andrew?
0:44And is it outpacing the growth from the business of selling the hardware direct to others?
4:13So here is the data that people are really searching for with Cerebras, which is how can you get the capacity in place faster, both on your own data centers or to get the hardware into the hands of customers for theirs?
5:45Andrew, what are the biggest factors on the supply chain side or on the operations side that are impacting your ability to deploy that capacity?
7:00Would you say that you see an impact of that in your case?
Just the second time since its IPO. Cerebras reported quarterly earnings yesterday after the closing bell, offering some investors growth that was slower than anticipated. Shares down 13.4%. I think that's on track for the biggest drop since the last week of June. Cerebras CEO Andrew Feldman joins us now. The first thing that I learned was there is a business renting out compute capacity that's still there. Could you give me a backstory on that, Andrew?
Oh, of course, there's a huge business of renting out compute capacity. I think it is. It's what the neo clouds do. It's what the hyperscalers do. It is a very profitable business.
Well, we have two parts of our business. We have a first party cloud. That means we design, manufacture and deploy equipment in our own data centers and we rent it out to our customers. That part of the business was up 281% year over year. Huge growth. Huge growth on that part of the business. We control the data centers. There was another part of our business where we sell our AI hardware to customers who want to do the exact same thing. Who wanted to deploy the equipment and either use it for themselves or break it up into little pieces and sell the compute to various customers. Right. Those customers, we call that our hardware business. We're selling hardware for their premise. And in Q2, some of our customers didn't have data centers available, so we were able to deliver less to them. And so right now, data centers are a challenge for everybody. We had some, we were able to deploy them for our own use and for the use of our cloud customers, our first party cloud customers. And so that business is absolutely ripping.
We're live on Bloomberg Television, and radio is free. CEO Andrew Feldman. And the reason I ask for the back story on that is that that cloud business was born out of needing to build datacenter capacity to test. The technology worked. It seems to be working.
It was, you know, we wanted to be able to provide demonstrations to customers without having to move hardware to their facilities. We didn't have a hyperscale customer at that time. And so there was a need to find a way to deliver compute services to people who didn't have a data center, didn't have a way to otherwise enjoy our blisteringly fast AI hardware. And so we set it up at first for ourselves and then for demonstrations. And there was so much demand on it over time that it's become a big business for us. And last quarter, Q2, it was an extraordinary business for us and expected to continue to grow at tremendous rate. Now, even though now we have hyperscale customers like AWS, now that we have frontier labs like OpenAI. That business continues to grow at an exceptional rate.
Okay. The hardware business. There is some confusion out there. You report on a core basis, which showed that the hardware division was up right on a gap or non-core basis. It would be otherwise. Just explain the story for the hardware business.
But the story is one of our large hardware customers had some warrants, and those warrants are subtracted from revenue. The value of those warrants are subtracted from revenue in GAAP accounting. And so it made the numbers look a little smaller than they were, actually. Demand is great. It's there, there is a backlog we know about shipping. And we've got 25.4 billion in backlog.
8 more exchanges in this transcript
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Feldman, A. (2026, August 13). Renting Compute Capacity Is a Huge Business, Cerebras CEO Says [Interview transcript]. Bloomberg Podcasts. CEOInterviews.AI. https://ceointerviews.ai/interview/1348460/
MLA
Andrew Feldman. "Renting Compute Capacity Is a Huge Business, Cerebras CEO Says." Bloomberg Podcasts, 13 Aug. 2026. Transcript, CEOInterviews.AI, https://ceointerviews.ai/interview/1348460/.
BibTeX
@misc{feldman2026_1348460,
author = {Andrew Feldman},
title = {Renting Compute Capacity Is a Huge Business, Cerebras CEO Says},
howpublished = {Interview transcript, Bloomberg Podcasts. CEOInterviews.AI},
year = {2026},
month = {aug},
url = {https://ceointerviews.ai/interview/1348460/},
note = {Speaker-attributed transcript with timestamps}
}
