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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

The past seven decades of microchip production have been a race to get smaller. Cerebras Systems, which hopes to break a drought in initial public offerings, is instead going big. Its Frisbee-sized chips are, it says, as fast as it gets at handling super-complex artificial intelligence models. In that sense, size may be on Cerebras’ side. In another, the opposite is true.

Cerebras hopes its jumbo wafers can take on industry champ Nvidia. The idea is that by plonking more memory and processing power on a larger area, data can be moved, stored and crunched faster and with less power consumption. The company’s tests suggest it enables Meta Platforms’ Llama 3.1 model to spit out answers about 20 times faster than rivals.

It is not just its speed that is unusual. The lossmaking firm gets almost all of its revenue from a single customer, Abu Dhabi’s G42. Large prepayments from that and other customers make up the lion’s share of its cash. If G42 makes a sufficiently big order in future it gets more shares at a discounted price, diluting IPO investors.

A further risk could come from irritating a colossus. Nvidia is the go-to for AI, and engineers are used to using its own proprietary programming language. Cerebras warns in its filing that large rivals could pressure their customers to give it the cold shoulder. They might not need to: anyone splurging vast sums on building bots may favour a supplier soundly tested in the field. Switching isn’t simple: using Cerebras chips means also using its other hardware and cooling systems.

Nvidia isn’t the only giant with sway over Cerebras’s future. Both firms’ chips are manufactured by the ubiquitous Taiwan Semiconductor Manufacturing Company. But where Nvidia is a big influential customer of TSMC, Cerebras is a tiny one. Semiconductor supply chains are long and brittle. The company has been stuck with unsold inventory before, and warns it may again.

Being a flea on the ankle of a giant could pay off: a little more business would go a long way. Assume Cerebras can keep up its recent habit of doubling revenue each six months, and it would be in line for $400 million or so this year. Put that on Nvidia’s 25-times multiple, and it is worth $10 billion.

Given the paucity of tech IPOs and the heat around anything AI, there is every chance investors might entertain that kind of valuation. But given the unusual risks, Cerebras would be best keeping its price ambitions smaller than its outsize chips.

john.foley@ft.com

Less than two weeks after Hurricane Helene slammed into Florida’s Gulf Coast and wreaked a path of destruction across the southeastern U.S., the state is again on high alert for another rapidly intensifying storm.

Forecasters upgraded Milton from a tropical storm to a hurricane on Sunday, a day earlier than expected, and warn that it is poised to reach Category 4 strength before making landfall in Florida midweek.

It strengthened into a “major” Category 3 hurricane early Monday morning when its maximum sustained winds started nearing 125 mph. It quickly intensified to Category 4 status with maximum sustained winds of 150 mph, the National Hurricane Center said just after 9 a.m. ET.

At that point, the storm was about 150 miles west-northwest of Progreso, Mexico, and about 735 miles west-southwest of Tampa. The coast of the Yucatan Peninsula is under a hurricane warning, while hurricane watches, storm surge watches and tropical storm watches and warnings are in effect for parts of the west coast of the Florida Peninsula.

Milton is expected to move just north of the Yucatan Peninsula on Monday and Tuesday before crossing the eastern Gulf of Mexico and approaching Florida’s west coast by Wednesday.

The NHC says most models agree that Milton will cross the Florida Peninsula, though people “should not focus on the exact track” because models still disagree about the exact location and timing of landfall.

Even so, forecasters warn that it is likely to be a “large and powerful hurricane at landfall in Florida, with life-threatening hazards along portions of the coastline.”

They say areas of heavy rainfall will impact portions of Florida on Monday, and again on Tuesday through Wednesday night, bringing “the risk of considerable flash, urban and areal flooding,” as well as the potential for moderate to major river flooding.

Parts of the Florida Peninsula and Keys could see 5 to 10 inches of rain through Wednesday night, with localized totals up to 15 inches in some areas.

There is also a growing risk of life-threatening storm surge and damaging winds for parts of Florida’s west coast beginning late Tuesday or early Wednesday. Forecasters say it could raise water levels to as high as 8 to 12 feet in coastal areas of Florida, including Tampa Bay.

“Residents in that area should follow any advice given by local officials and evacuate if told to do so,” the NHC said, referring to the west coast of the peninsula.

Floridians are bracing for evacuations and impact

Florida Gov. Ron DeSantis has already expanded an emergency declaration to cover 51 of the state’s 67 counties and is warning people across the peninsula to prepare.

“Do not get wedded to the cone,” he tweeted on Sunday. “Floridians should prepare now for potential impacts, even if you live outside of the forecast cone. We recommend following all evacuation orders from your local officials.”

Florida Emergency Management Director Kevin Guthrie said on Sunday that the state is preparing “for the largest evacuation that we have seen most likely since 2017 Hurricane Irma,” when nearly 6.8 million Floridians left their homes, resulting in statewide traffic jams.

But he also cautioned inland residents who don’t live in an evacuation zone or depend on electricity for medical needs that “it may be better for you to just stay in place.”

Several Florida counties have ordered evacuations starting as early as Monday morning.

Manatee County and Pasco County have ordered the evacuation of residents in certain low-lying areas, mobile homes and RVs, while Pinellas County ordered the evacuation of all residential healthcare facilities within certain zones.

Emergency officials are urging Floridians to look up their zone, plan an evacuation route and leave as soon as they’re ordered to do so.

Guthrie also said Floridians should take into account that many are still recovering from Helene: Did they use up their reserves of water, food, pet food? Do they need to buy fresh batteries? Have they restocked their supply kits to last each family member up to seven days?

“Please make sure you’re doing that today,” he said.

Lines started forming at gas stations on Sunday as people stocked up on fuel, water and other supplies, member station WGCU reported.

It notes that public school districts in many counties will be closed from Monday through at least Wednesday and that Florida Gulf Coast University — near Fort Myers — will close its campus Tuesday and Wednesday, after shifting to remote operations.

The St. Pete-Clearwater International Airport has already announced the cancellation of all Allegiant Air flights on Wednesday and Thursday.

Milton is forecast to spare other states submerged by Helene

Milton is poised to strike an area still recovering from Helene’s Category 4 winds and rains.

But it is expected to exit into the Atlantic Ocean, sparing many of the southeastern states that were hit hardest by Helene, including Georgia and the Carolinas.

More than 220 people were killed by Helene, one of the deadliest hurricanes to hit the mainland U.S. since Katrina in 2005. The Associated Press reports that about half of the victims were in North Carolina, where historic flooding destroyed entire communities.

Abnormally warm water in the Gulf of Mexico, fueled by human-caused climate change, has made it easier for hurricanes to strengthen rapidly and bring even more wind and rain ashore.

Milton is the ninth hurricane to form in the 2024 Atlantic hurricane season, which runs from June through November. It’s the fifth to form since Sept. 25 alone, breaking a previous record of two during that period.

And this is officially the first time three simultaneous hurricanes have been recorded in the Atlantic Ocean after September, according to storm researcher Philip Klotzbach. In addition to Milton, Hurricanes Kirk and Leslie are also brewing.

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Israelis on Monday marked the first anniversary of Hamas’s deadly October 7 attack, which ignited a devastating war in Gaza that has spiralled into a multi-front conflict and threatens to destabilise the entire region.

In the year since, the fighting has spread across the Middle East, with Israeli forces exchanging fire with militants in Yemen, Syria and Iraq, launching a ferocious bombing campaign and ground offensive in Lebanon and on the verge of a broader conflict with Iran.

The violence continued on Monday, with Israel bombing targets across Gaza to thwart what the military said was an “immediate” threat of rocket fire, and launching further strikes against the Hizbollah militant group in southern Lebanon.

Ceremonies in southern Israel marking the anniversary of Hamas’s attack began at 6.29am, the same time that the group launched its assault last year. Israeli President Isaac Herzog laid a wreath at the site of the Nova music festival in Re’im, one of the centres of Hamas’s onslaught.

“This is a scar on humanity,” he said. “This is a scar on the face of the earth.”

Two minutes into the ceremony, Hamas fired four rockets at Israel from Gaza. The rockets were intercepted but sent participants at the vigil in Kfar Aza, one of the kibbutzim attacked by Hamas last year, into shelters. Later on Monday, rockets fired from Gaza set off sirens in Tel Aviv.

Other vigils and events are due to be held throughout the country on Monday.

Hamas’s October 7 attack was the deadliest day for Jews since the Holocaust, with its militants killing 1,200 people, according to Israeli officials, and taking a further 250 people hostage.

More than 100 people are still being held in Gaza, although Israeli officials have said that not all are believed to be alive. Relatives of hostages holding pictures of their loved ones gathered on Monday outside Israeli Prime Minister Benjamin Netanyahu’s home in Jerusalem, where they held a minute’s silence.

In response to Hamas’s attack, Israel launched a massive assault on Gaza, which has killed almost 42,000 people, according to Palestinian officials, displaced most of its 2.3mn inhabitants and fuelled a humanitarian catastrophe in the enclave.

On Sunday, Israeli forces launched a fresh offensive in Jabalia, bombarding and then encircling the neighbourhood in northern Gaza, with officials saying Hamas was regrouping in the area, where Israel has carried out several large operations throughout the war.

Despite the uptick in fighting in Gaza, in recent weeks, Israel has increasingly focused its forces on its border with Lebanon, where it has been trading fire with Hizbollah since the militant group began launching rockets at Israel in support of Hamas last October.

Last week, Israel began a ground offensive against Hizbollah, following a devastating bombing campaign that has decimated the group’s chain of command — including killing its leader Hassan Nasrallah — left more than 1,000 people dead and displaced hundreds of thousands.

Overnight, Israeli forces bombed more targets in Beirut, following a round of strikes on Sunday that data from Acled, which has been mapping the attacks, suggested was the most intense night in Israel’s two-week air campaign.

In an indication that Israel was also stepping up its ground offensive in Lebanon, the Israeli military said on Monday that soldiers from a third division — the 91st — had joined the fighting.

Meanwhile, Israeli paramedics said they had treated 10 people for injuries and anxiety after rockets launched from Lebanon landed in Haifa and Tiberias on Sunday night.

The spiralling hostilities have also drawn in Iran, which last week launched 180 ballistic missiles at Israel in a barrage that it said was a response to Nasrallah’s assassination and the killing of Hamas’s political leader Ismail Haniyeh in Tehran in July.

Netanyahu has vowed retaliation for the missile attack, and the country’s defence minister, Yoav Gallant, said on Sunday that the response would come “in the manner of our choosing, at the time and place of our choosing”.