Artificial intelligence chip developer Cerebras said Monday that it has obtained clearance from a U.S. committee to sell shares to Group 42, a Microsoft-backed AI company based in the United Arab Emirates.

That clearance came from the Committee on Foreign Investment in the United States, or CFIUS, and it’s a key step for Cerebras in its effort to go public. Cerebras competes with Nvidia, whose graphics processing units are the industry’s choice for training and running AI models, but most of its revenue comes from a customer called Group 42.

Cerebras filed to go public in September but has not provided details on timing or size for the initial public offering. The regulatory overhang was tied to the company’s relationship with Group 42, which was the source of 87% of Cerebras’ revenue in the first half of 2024, made the IPO look uncertain.

“We thank @POTUS for making America the best place in the world to invest in cutting-edge #AI technology,” Andrew Feldman, Cerebras’ co-founder and CEO, wrote in a Monday LinkedIn post. “We thank G42’s leadership and the UAE’s leadership for their ongoing partnership and commitment to supporting U.S headquartered AI companies.”

Lawmakers have previously worried about Group 42’s connections to China. Last year Mike Gallagher, then a Republican member of Congress from Wisconsin, said in a statement that he was “glad to see G42 reduce its investment exposure to Chinese companies.” Microsoft later announced a $1.5 billion investment in Group 42.

Both Cerebras and Group 42 had given voluntary notice to CFIUS about the sale of voting shares, according to the Sunnyvale, California-based company’s IPO prospectus. Group 42 had agreed to buy $335 million worth of Cerebras shares by April 15, according to the prospectus. The two companies later changed the agreement to say Group 42 would be buying non-voting shares, prompting them to withdraw their notice, because they said they did not believe CFIUS had jurisdiction over sales of non-voting securities.

CFIUS did not immediately respond to a request for comment.

Just a handful of technology companies have gone public since 2021, as higher interest rates made unprofitable companies less desirable. But in recent months, Cerebras and a few technology-related companies have taken steps toward IPOs, and last week, AI infrastructure provider CoreWeave went public.

CoreWeave shares fell 7% on Monday, its second day of trading.

WATCH: Cerebras Systems likely to postpone IPO after facing delays with CFIUS Review, reports say

Tesla’s stock just wrapped up its worst quarter since 2022 and suffered its third-steepest drop in the company’s 15 years on the public market.

Shares of the electric vehicle maker plunged 36% in the first three months of the year.

The last time Tesla had a worse stretch was at the end of 2022, when the stock cratered 54%. That quarter included CEO Elon Musk’s sale of more than $22 billion worth of Tesla shares to finance his $44 billion acquisition of Twitter, later renamed X. On Friday, Musk said his artificial intelligence startup xAI has acquired X in a deal valuing the social media company at $33 billion.

Tesla’s first-quarter drop wiped out over $460 billion in market cap. The majority of the quarter overlaps with Musk’s time in the second Trump administration, leading an effort to slash government spending and regulations, and terminating tens of thousands of federal employees.

Musk is leading what’s known as the Department of Government Efficiency, or DOGE. As of Monday, the DOGE website claimed that, through March 24, the program had notched $140 billion in federal spending reductions, a number equal to less than one-third of Tesla’s valuation loss in the first quarter.

“My Tesla stock and the stock of everyone who holds Tesla has gone, went roughly in half,” Musk said on Sunday night at a rally he held in Green Bay, Wisconsin, to promote the right-wing judge he’s backing for Tuesday’s state supreme court election. “This is a very expensive job is what I’m saying.”

DOGE’s website contained numerous errors previously, causing the group to revise its own claims about its savings. And many of Musk’s allegations about waste, fraud and abuse in the federal budget have also been shown to be misleading or false.

Musk recently said on a Fox News interview with Bret Baier, that he and DOGE plan to slash $1 trillion from total federal spending levels by May.

Musk’s role in the White House is one factor weighing on Tesla’s stock, as it’s contributing to waves of protests, boycotts and violent attacks on Tesla stores and vehicles around the world. President Trump’s automotive tariffs are also a concern as they involve Tesla’s key suppliers, notably Mexico and China. Tariff fears sparked a broader selloff in tech stocks, with the Nasdaq closing the quarter down 10%, its biggest drop since 2022.

Tesla faces other headwinds, such as a steep decline in new vehicle sales, and pressure to deliver on Musk’s promises for robotaxis while rivals extend their lead in the market.

Musk has said Tesla will launch a driverless ride-hailing business in Austin, Texas in June, but some analysts are voicing skepticism about the company’s ability to meet that deadline.

For about a decade, Musk has promised that existing Tesla cars can be turned into robotaxi-ready vehicles with one more software upgrade. On the company’s fourth-quarter earnings call, Musk said that a forthcoming version of Tesla’s Full Self-Driving software will require a hardware upgrade as well.

While the first-quarter stock drop has been painful for shareholders, they’ve experienced similar volatility in the recent past. In the first quarter of 2024, the shares plunged 29% due to declining auto sales and increased competition. But the stock rallied the rest of the year to finish up 63%.

“Long term, I think Tesla stock is going to do fine,” Musk said at the Green Bay rally. “So, you know, maybe it’s a buying opportunity.”

WATCH: How cutting federal workers impacts government bloat

Wall Street banks waited a long time for a billion dollar IPO from a U.S. tech company. They’re not making much money from the one they got.

The underwriting discount and commissions paid by artificial intelligence infrastructure provider CoreWeave, which hit the Nasdaq on Friday, amounted to just 2.8% of the total proceeds, according to a Monday filing with the Securities and Exchange Commission. That means that of the $1.5 billion raised in the offering, $42 million went to underwriters.

That’s on the low side historically. Since Facebook’s record-setting IPO in 2012, there have been 25 venture-backed offerings for tech-related U.S. companies that have raised at least $1 billion, with an average underwriting fee of 4%, according to data from FactSet analyzed by CNBC. Facebook, in raising $16 billion, paid out the lowest percentage at 1.1%.

Morgan Stanley, which led the Facebook IPO, had the coveted lead left spot on CoreWeave, followed by JPMorgan Chase and Goldman Sachs. The three banks are typically the leaders when it comes to tech IPOs. They’ve been counting on a revival in the market under President Donald Trump after a lull dating back to the end of 2021, when soaring inflation and rising interest rates put a halt on new offerings.

But CoreWeave’s initial trading sessions aren’t providing much confidence in a rebound. After lowering its price to $40 from a range of $47 to $55, CoreWeave failed to notch any gains on Friday and fell 7% on Monday to $37.20.

Declines in the broader market have weighed on CoreWeave, but investors also have specific concerns about the company, including its reliance on Microsoft as a customer, its hefty level of debt and the sustainability of a business model built around reselling Nvidia’s technology.

CoreWeave is the first among venture-backed companies to raise $1 billion or more since Freshworks in September of 2021. Freshworks carried an underwriting fee of 5.3%, while UiPath, which hit the market a few months earlier, paid 5%. In April of that year, AppLovin carried a 2.6% fee, the last time a billion-dollar offering had a lower fee than CoreWeave’s.

Among the few more recent IPOs — which all raised less than $1 billion — the fees were much higher. For Instacart and Klaviyo in 2023 and Reddit, Astera Labs, Rubrik and ServiceTitan last year, payouts were all at least 5%.

As lead in the CoreWeave deal, Morgan Stanley was given the highest percentage allocation of shares for clients at 27%. JPMorgan received 25%, and Goldman Sachs got 15%.

Those percentage allocations typically correspond fairly closely to how much of the fees each bank receives, though with a slightly higher amount to the lead bank for the management fee piece.

David Golden, a partner at Revolution Ventures who previously led tech investment banking at JPMorgan, said “there’s a little ‘black box’ involved in the underwriting compensation” that’s not disclosed in the prospectus. Based on his experience with IPOs and the historical norm, Golden estimated that Morgan Stanley got at least $13 million for its work, amounting to just over 30% of the total payout, while the number for Goldman Sachs would be slightly above $6 million.

Representatives from Morgan Stanley and Goldman Sachs declined to comment. A spokesperson for JPMorgan didn’t immediately respond to a request for comment.

WATCH: Cramer’s Mad Dash on CoreWeave