Warsh, 56, a former top Fed official, was confirmed Wednesday in a largely party-line 54-45 vote and will replace Jerome Powell as chair at an unusually difficult time for the independent agency.

Inflation has topped the Fed’s 2% target for five years and is now rising faster because of spiking gas prices. The Fed’s interest rate-setting committee is divided and saw the most dissenting votes in more than three decades last month. And Powell, after years of personal attacks from Trump and an unprecedented Justice Department investigation, plans to remain on the Fed’s board even after his term as chair ends, potentially creating a competing power center.

Senate Majority Leader John Thune, R-S.D., said in a floor speech that it’s critical that a Fed chair “understand not only the macro” but also “appreciate the microeconomy: and that’s the hardworking Americans, their jobs and their livelihoods.”

“Kevin Warsh is just such a person,” Thune said.

Trump has demanded change at the Federal Reserve

The Fed has faced threats to its independence from Trump, who has repeatedly attacked Powell for not cutting interest rates. Trump also sought to fire Fed governor Lisa Cook and launched an investigation into Powell’s Senate testimony about a building renovation.

The probe of Powell had threatened to derail Warsh’s nomination, as Republican Sen. Thom Tillis of North Carolina vowed to withhold support until the investigation was terminated. The probe was ultimately dropped in April. Every Republican voted for Warsh on Wednesday, as did Democratic Sen. John Fetterman of Pennsylvania.

Kevin Hassett, director of the White House’s National Economic Council, said in a Fox News interview on Sunday that he believes the markets are relieved that Warsh “is going to help lower interest rates over time.”

“Obviously, data driven,” said Hassett. “I’m not putting any pressure on Kevin Warsh.”

In December, Trump said on his social media platform that he wanted a Fed chair who would cut interest rates when the stock market rose — the opposite of what traditional economics would prescribe — and added, “Anyone that disagrees with me will never be the Fed chairman!”

Trump’s comments have fueled concerns over whether Warsh will set rates based on economic conditions or instead seek to appease Trump, even if doing so could worsen inflation. At Warsh’s confirmation hearing last month, Sen. Elizabeth Warren, a Democrat from Massachusetts, derided him as a “sock puppet” for Trump.

Still, Warsh denied at the hearing that Trump had pressured him to reduce the Fed’s key rate.

“I will be an independent actor if confirmed as chair of the Federal Reserve,” he said.

A critic of the Fed’s leadership in the past

Warsh has been highly critical of the Fed’s recent track record, particularly the inflation spike in 2021-22, the worst in four decades.

He has called for limiting the Fed’s communications, which would be a sharp shift after decades of growing transparency. He has argued that some of its communications tools, such as quarterly forecasts of where its key rate may head, have made it harder for officials to switch gears.

Senate Democrats have also condemned Warsh for not fully divulging the details of his wealth, which amounts to at least $100 million. His investments include stakes in Polymarket and SpaceX, but he hasn’t revealed the size of those holdings. He promised to sell all such assets within 90 days of being sworn in.

“He will be the wealthiest Fed chair in history, but he refuses to provide transparency to the American people about who he is entangled with,” Warren said.

Warsh faces difficult economic conditions

The Fed is still grappling with how to respond to the 50% spike in gas prices caused by the war in Iran. The increase has boosted inflation, which reached 3.8% in April.

The Fed is tasked by Congress with keeping prices stable, which it seeks to do by raising its short-term rate to make borrowing and spending more expensive, cooling growth and inflation.

The Fed typically looks past temporary price increases that stem from supply disruptions, such as the war’s cutoff of oil through the Strait of Hormuz, because those prices typically level off — or even fall — once supply is restored.

But the Fed also followed that approach after the coronavirus pandemic snarled global supply chains. Inflation turned out to last longer than expected, and Powell and other Fed officials have acknowledged that they waited too long to raise rates. Inflation surged to 9.1% by June 2022.

The Fed’s rate-setting committee has kept rates unchanged for three straight meetings as it evaluates the spike in gas prices. At its most recent meeting last month, three members of the committee objected to language that suggested its next move would be a rate cut. They preferred more neutral language that would allow for a hike. Many Fed watchers saw those dissents as a warning shot to Warsh that he won’t be able to easily engineer rate reductions.

A fourth member of the 12-member committee, Stephen Miran, dissented in favor of a rate cut, as he has at every meeting since Trump appointed him to the Fed’s board last September. Miran is serving until a replacement is named, and Warsh will take his spot.

Powell, meanwhile, said at a news conference on April 29 that he would remain as a Fed governor until the Justice Department closes its investigation into the Fed’s building project, the first time a chair may stay on the board for an extended period since 1948. His term as a governor lasts until January 2028.

U.S. Attorney Jeanine Pirro has dropped the government’s probe, but she has said it could be reopened if the Fed’s inspector general, which has looked into the renovation project since last July, finds evidence of criminal activity. ___

Follow the AP’s coverage of the Federal Reserve System at https://apnews.com/hub/federal-reserve-system.

Cerebras is expected to make its public debut on Thursday, and investors just can’t wait. After its initial public offering (IPO) filing a couple of weeks ago, the offering is 20 times oversubscribed, leading the company to increase its target share price to between $150 and $160 and increase the number of shares offered. The high end of that range would value the company at roughly $48.8 billion.

That might seem like small potatoes compared to competing AI semiconductor stocks like Nvidia (NVDA +2.33%), which is worth more than 100 times that amount. Broadcom (AVGO 0.60%) is worth nearly $2 trillion, and AMD‘s (AMD 0.67%) market cap tops $700 billion. But with Cerebras’ excellent technological capabilities and potential disruption of AI inference data centers, investors might think it has a shot at competing with the big boys. Should you buy the stock at its IPO?

What’s the advantage of using Cerebras’ chips?

Cerebras designs wafer-scale chips that use an entire 12-inch silicon wafer. The result is a chip roughly 30 times the size of Nvidia’s Blackwell B200 package with 19 times as many transistors per chip, Cerebras notes in its S-1 filing.

Making chips at that scale is no easy feat, but it comes with significant advantages. Since connections between logic cores and memory capacity are etched right into the silicon, Cerebras chips can process data much more quickly while using less power. Additionally, there’s less overhead needed for networking and interconnect between chips. The result is a chip that can perform many AI inference tasks much more quickly and at lower costs than a traditional graphics processing unit (GPU) cluster setup.

That’s why Cerebras’ infrastructure has caught the attention of OpenAI and Amazon (AMZN +1.61%) Web Services (AWS). OpenAI has committed $20 billion to rent 750 megawatts’ worth of capacity directly from Cerebras between 2026 and 2028. Amazon plans to buy Cerebras’ chips to work in conjunction with its own Trainium chips in Amazon-owned data centers.

What are the risks facing Cerebras?

There are some major risks facing Cerebras as it makes its public debut.

First and foremost, investors will note that Cerebras’ backlog climbed to $24.6 billion at the end of 2025, with the majority of that attributable to its contract with OpenAI. In other words, Cerebras faces severe customer concentration risk. The AWS deal will diversify that revenue a bit, but Cerebras will likely have to prove itself before attracting more customers to its data center business.

To that end, the company faces execution risk. It’ll have to stand up 250 megawatts of computing capacity for OpenAI by the end of the year. Management has never built or operated a data center of that size before. If it encounters any issues scaling, it could negatively affect its OpenAI contract and its ability to attract additional customers.

Adding to the scaling challenge is that Cerebras’ chips are manufactured by Taiwan Semiconductor Manufacturing (TSM +0.65%), which has seen tremendous demand for its services. Some of TSMC’s biggest customers are exploring options for secondary sources, as the largest chip manufacturer sees growing demand for its leading-edge technology. TSMC, meanwhile, is retrofitting many of its existing facilities to add capacity for its leading-edge N3 and N2 processes while reducing capacity for N7 and N5.

Taiwan Semiconductor Manufacturing

Today’s Change

(0.65%) $2.59

Current Price

$399.87

Key Data Points

Market Cap

$2.1T

Day’s Range

$391.47 – $404.65

52wk Range

$188.81 – $420.00

Volume

612K

Avg Vol

13M

Gross Margin

61.02%

Dividend Yield

0.84%

Cerebras notably uses TSMC’s N5 process for its wafer-scale chips. No other chip manufacturer can viably produce wafer-scale chips, creating a significant supply chain risk for Cerebras as it scales.

How does Cerebras stack up with other AI chip stocks?

There’s no doubt that a small company with a massive backlog relative to its current revenue deserves a premium valuation even with the risks outlined. Cerebras already has the backlog in place to grow its revenue tenfold within a few years as long as it executes. At a valuation of $48.8 billion, it would trade for roughly 96 times its 2025 sales.

To put that in perspective, Nvidia currently trades for 25 times trailing-12-month sales. Broadcom trades for 29 times sales, and AMD trades for 19 times sales. Importantly, none of those companies are expected to grow their top lines as quickly as Cerebras. Still, none of them are slouches. Broadcom and AMD are each expected to double their revenue from 2026 to 2028, and Nvidia’s expected to grow its top line 57%. What’s more, Nvidia, Broadcom, and AMD are much less risky than Cerebras.

Today’s Change

(2.33%) $5.14

Current Price

$225.92

Key Data Points

Market Cap

$5.4T

Day’s Range

$221.56 – $227.84

52wk Range

$129.16 – $227.84

Volume

5.2M

Avg Vol

171M

Gross Margin

71.07%

Dividend Yield

0.02%

Cerebras’ technology is compelling, but it’s not a complete replacement for the chips made by Nvidia, AMD, or Broadcom. It will remain a subset of the overall AI chip market even as that subset continues to grow quickly. The $48.8 billion price tag on Cerebras’ IPO looks like too much of a premium to pay, and investors may be better off waiting to see if the market offers a better entry point for the stock later.