Graphcore, the Bristol-based chip designer at the forefront of the race to power a new age of AI capabilities, has closed a $22 million investment round that values it at almost $3 billion. After closing the raise, led by the Ontario Teachers’ Pension Plan and also including asset managers Schroders and Fidelity International, the 4-year-old company is now one of the UK’s most valuable still-private enterprises.
Graphcore was founded in 2016 by Simon Knowles and Nigel Toon, both hardware technology entrepreneurs with previous success, and has now raised over $710 million in investment. It specialises in manufacturing chips specifically tailored to the needs of energy intensive machine learning applications. The kind of standard processors found in personal electronics like smartphones and laptops are not up to supporting modern AI needs.
Following its latest attraction of investment capital, Graphcore is now believed to have over $440 million of cash with which to fund its R&D and commercial growth. The founders have also hinted that the technology company’s next fundraising could come in the form of an IPO. However, that would unlikely be before 2022, with plenty of cash in the bank for now.
Before launching Graphcore, Mr Toon and Mr Knowles previously built Icera, another semiconductor company, from the ground up before selling it on to US-giant Nvidia for $435 million in 2011. Nvidia recently bought up Arm, another UK chip specialist, in a multi-billion-dollar deal and, along with Intel, leads to the global high tech chip market. Graphcore sees itself as an eventual rival to both. Especially when it comes to the chips that will power a new generation of artificial intelligence applications.
The processing demands of cutting-edge AI applications, such as driverless vehicles and automated factories and warehouses, requires more powerful chips than we’ve produced until now. Graphcore’s Colossus chip, named after an early computer built for the Bletchley Park codebreaking centre used during the Second World War, is said to be the world’s most complex. The original Colossus computer stayed a secret, even from allies like the USA, for years after the war ended, which led to incorrect assumption about who developed certain early computing technologies. Mr Knowles has hinted naming Graphcore’s chip after it is a nod to the idea the USA should not assume the invent “everything first”.
Graphcore counts Microsoft, Samsung, BMW, Bosch and Sequoia Capital among existing investors. Chinese technology giant Huawei is also, somewhat controversially, a small shareholder, though Graphcore insists this does not allow it “visibility of any” of its intellectual property.
Mr Toon believes the quality of his company’s backers is an indicator of the regard in which Graphcore’s chip technology is held. He said their confidence in the company is a result of “the competence we have demonstrated building our products and our business”.
He went on to say:
“We have created a technology that dramatically outperforms legacy processors, a powerful set of software tools that are tailored to the needs of AI developers, and a global sales operation that is bringing our products to market”.
“With our products and global sales operation in place, we expect 2021 to be another big year for the company”.
“With advances in artificial intelligence moving apace, we look forward to more innovation, enabled and powered by Graphcore technology.”