Cray Inc. Lands $18.5 Million U.S. Army Contract for One of World's Most Powerful Supercomputers; Cray Supercomputer to Support Army and Defense Science and Technology.

Business Editors/High-Tech and Military Writers

SEATTLE--(BUSINESS WIRE)--May 10, 2000

Cray Inc. (Nasdaq:CRAY) today announced it has been awarded an $18.5 million contract to upgrade the U.S. Army High Performance Computing Research Center's (AHPCRC) Cray T3E-1200(TM) supercomputer. The upgraded system will be one of the world's most powerful. This marks the first major order for the company formed from the March 31, 2000, Tera Computer Company acquisition of Cray Research from SGI. The contract also includes an option for AHPCRC to acquire next-generation Cray SV2(TM) supercomputer technology.

"A multi-million-dollar order for supercomputers to support the Department of Defense and the US Army's science and technology base is a strong indicator of customer confidence in the newly formed Cray Inc. We are totally focused on meeting the world's most demanding supercomputing needs, and will continue to leverage our strengths as an independent company in this marketplace," said Cray Inc. president and CEO Jim Rottsolk. "It's especially gratifying that the AHPCRC also selected an option to acquire next-generation Cray SV2 supercomputer technology from us."

With the addition of 816 processors to its existing 272-processor Cray T3E-1200(TM) supercomputer, the AHPCRC will operate the largest Cray T3E system in the world. The expanded 1,088-processor system increases the computational capability of the AHPCRC's existing system to a peak performance of 1.3 trillion calculations per second (teraflops) and memory size to 557 gigabytes. This represents a quadrupling of the system's computational capability. The total memory and computational power of this Cray T3E, coupled with its ability to support production supercomputing with high system availability and stability, make this system a unique research tool for addressing critical defense technology issues.

"The Cray T3E system's actual, sustained performance is even more impressive than its theoretical peak performance," said Rottsolk. "The Cray T3E currently holds the world record for sustained speed on a real-world application."

The expanded Cray T3E system will be used to support the basic research activities of the AHPCRC and its partner academic institutions and also, through the Department of Defense's High Performance Computing Modernization Program, the basic research requirements of the Department of Defense.

The AHPCRC academic partner institutions include the University of Minnesota, and Clark Atlanta, Florida A&M, Howard, Jackson State, Northwestern and Rice Universities. Clark Atlanta, Florida A&M, Howard and Jackson State are minority serving institutions and have network access to the system via an Army-funded AHPCRC dedicated network. The system is being acquired by and will be operated for the AHPCRC by Network Computing Services, Inc. (NetworkCS).

Funding for acquisition of the system was made available through the DoD's High Performance Computing Modernization Program under Department of the Army Contract DAAH04-95-C-0008. Delivery and acceptance of the system is expected in mid-year 2000. Revenues for product sales are recorded by Cray Inc. upon customer acceptance.

The Cray T3E series is the world's most powerful supercomputer, representing 24 of the top 50 systems on the most recent Top 500 list - an independent ranking of the world's most powerful supercomputers (www.top500.org). Its extreme scalability helps customers achieve supercomputing milestones on real-world applications, such as the breakthrough simulation of metallic magnetism in iron that earned a scientific team from Oak Ridge National Laboratory and Lawrence Berkeley's National Energy Research Scientific Computing Center (NERSC) the 1998 Gordon Bell Prize. Cray Inc. plans to release an enhancement for the Cray T3E product line later this year.

NetworkCS, as systems integrator and computing facilities manager, will operate the AHPCRC's expanded Cray T3E supercomputer. NetworkCS is a subsidiary of netASPx, Inc. netASPx provides a broad spectrum of information services, including integrated business to business E-commerce applications, systems integration, applications management, network computing, and shared-computing services to its customers on some of the world's most powerful high-performance computer systems.

About Cray Inc.

Cray Inc., formerly Tera Computer Company, designs, builds and sells high-performance vector processor and general-purpose parallel computer systems. The company has leading edge technology, multiple product platforms, nearly 900 employees, a $2 billion installed base of over 600 computers worldwide, major manufacturing and service capabilities and extensive global customer relationships. Cray believes its Multithreaded Architecture and Cray T3E and SV2 systems together represent the future of supercomputing. Go to www.cray.com for more information on the company.

Safe Harbor Statement

This press release contains forward-looking statements. There are certain factors that could cause Cray's execution plans to differ materially from those anticipated by the statements above. Among such factors risks are expected delivery and acceptance times, and timely availability of commercially acceptable components from third party suppliers. For a discussion of such risks, and other risks that could affect Cray's future performance, please see "Risk Factors" in Tera Computer's most recent SEC Form 10-K.

Note to Editors: Cray is a registered trademark, and Cray SV2, Cray T3E and Cray T3E-1200 are trademarks of Cray Inc. All other trademarks are the property of their respective owners.