The registration statement for the proposed merger of El Dorado Hills-based AI chip company Blaize Inc. into BurTech Acquisition Corp. anticipates the new Blaize will go public before the end of the year.
At the time of the announcement of the merger in December, the deal valued Blaize at around $894 million, but the final value depends on many factors and an affirmative vote of BurTech (Nasdaq: BRKH) shareholders.
If affirmed, the new Blaize could become the region’s largest publicly traded company by market capitalization.
Currently, the largest locally based public company is Folsom-based PowerSchool Holdings Inc. (NYSE: PWSC) with a market capitalization of $3.7 billion, but PowerSchool is in the midst of being taken private by private equity firm Bain Capital LP in a $5.6 billion deal expected to close this quarter.
Blaize develops microprocessor architecture and user-programmable software platforms for artificial intelligence in products for markets including the automotive, technology, industrial automation and health care industries.
The company’s programmable processor architecture features a low-code and no-code software studio platform so users can customize their applications of AI at the periphery of the network and also in data centers. Some of Blaize’s customers are server manufacturers.
According to the registration statement filed by New York-based BurTech Acquisition, BurTech officers and directors collectively owned approximately 68.5% of issued and outstanding shares of BurTech class A common stock as of March 31. They have agreed to vote those shares in favor of the merger.
BurTech’s board of directors has previously unanimously approved the merger agreement, and it recommends all other shareholders to vote for the merger, with a vote expected in the fourth quarter this year.
In its registration, Blaize reported net losses of $87.6 million in 2023 and $104.6 million in 2022. As a private company, it had never had to disclose those metrics before.
In recent periods, the company’s revenue has been attributed to non-recurring engagements with automotive partners in engineering and some sales of hardware. The company’s revenue has been about $3.8 million each for the past two calendar years.
The registration includes a disclosure that Blaize's independent accounting firm has expressed "substantial doubt" about Blaize's "ability to continue as a going concern." The statement cites myriad financial risks to the company, including the new risk that Blaize this year began to develop next-generation silicon products, which are expected to remain in development for at least two years before being available for sale.
“Such chip development is a highly complex process involving specialized third-party partners, and we cannot guarantee that the chip will initially perform as designed,” the registration document states.
“Additionally, we may encounter unforeseen operating expenses, difficulties, complications, delays, and other unknown factors that may result in losses in future periods,” it said.
In April, Blaize raised $106 million to fund operations through when it expects to go public later this year. That funding was in the form of convertible notes and included existing investors and new investors including venture capital firm Rizvi Traverse Management of West Palm Beach, Florida, Switzerland-based Ava Investors and BurTech LP LLC.
Previous investors in Blaize that participated in the April round of funding included Bess Ventures, Franklin Templeton parent company San Mateo-based Franklin Resources Inc. (NYSE: BEN), Japanese auto parts maker Denso Corp., Mercedes-Benz of Germany and Singaporean conglomerate Temasek Holdings Ltd.
Before the April announcement, Blaize had raised a total of $224 million in equity investments from venture and strategic investors.
BurTech LP is the sponsor of BurTech Acquisition Corp., the special purpose acquisition company, or SPAC, that Blaize plans to merge with to go public in the fourth quarter.
Special purpose acquisition companies are publicly traded companies that exist only to merge with private companies. They are often called blank check companies, because the initial investors are investing in the vehicle and its management to find a company to buy. They have become an active way for companies to go public in recent years, peaking about four years ago.
BurTech is led by CEO Shahal Khan, who is also CEO of private wealth management firm Burkhan World Investments.
A core value proposition of Blaize is its AI Studio, a software platform that allows customers to program its chips using an intuitive group of tools that don’t require a software engineer to write code.
The hallmark of using Blaize AI chips at the periphery of the network is that they make split-second decisions at the edge of networks, rather than awaiting data center response, which can add latency inactions.
Blaize chips are currently in production domestically. The chips are being manufactured in the U.S. for some customers who may be sensitive to where chips are made. Blaize has been delivering a limited number of chips to customers since 2020.
