SoftBank Group acquires AI chipmaker Graphcore

Once touted as a rival to Nvidia, which has seen its own valuation soar due to surging demand for AI computer chips, Britain’s Graphcore has struggled to secure the investment needed to compete

Japan’s SoftBank Group has bought AI chipmaker Graphcore for an undisclosed sum, ending long-running speculation over the company’s future.

Once touted as a rival to Nvidia, which has seen its own valuation soar due to surging demand for AI computer chips, Britain’s Graphcore has struggled to secure the investment needed to compete.

Valued at $2.77 billion at the end of 2020, a filing published last year revealed Graphcore needed more cash to break even, after cutting its headcount by a fifth to 494 employees, and shutting down operations in Norway, Japan, and South Korea.

Speaking at a media briefing on Thursday, cofounder and Chief Executive Officer Nigel Toon said the SoftBank deal would provide Graphcore with the resources needed to compete at a global level, but admitted the firm had faced difficulties.

The piece that surprised us was the speed at which this has taken off, and the scale that is involved, he added.

This is a level of investment that is utterly massive. Graphcore, as a modestly-sized firm compared to those we are competing with, has actually managed to go toe-to-toe and build world-class technology, he said.

Toon, who will stay on in his role, declined to comment when asked how much SoftBank had paid for the firm.

Reflecting on the state of the British tech industry, Toon cited British pension funds’ historic unwillingness to invest in fast-growing startups as a hurdle to growth.

There is a huge opportunity here, but there is a lot of structural things that still need to be fixed, he said.

If you look at where our money came from, some of it came from the UK, but the majority of it came from other regions. That is the reality of it, and that is the piece that we are going to need to fix, going forward, he added.