Japan’s SoftBank Group has acquired artificial intelligence chipmaker Graphcore for an undisclosed amount, ending longstanding speculation about the company’s future.
Background and Challenges
Once considered a rival to Nvidia, whose valuation has soared due to the high demand for AI computer chips, Britain’s Graphcore has struggled to secure the necessary investment to remain competitive. Valued at $2.77 billion at the end of 2020, a filing last year revealed that Graphcore needed additional funds to break even after reducing its workforce by 20% to 494 employees and shutting down operations in Norway, Japan, and South Korea.
SoftBank Deal
Speaking at a media briefing on Thursday, co-founder and CEO Nigel Toon said the SoftBank deal would equip Graphcore with the resources required to compete globally, although he acknowledged the company’s past difficulties. “The speed at which this has taken off and the scale involved has been surprising,” Toon said. “This level of investment is enormous. Despite being a modestly-sized company compared to our competitors, Graphcore has managed to build world-class technology.”
Toon, who will continue in his role, declined to disclose the amount SoftBank paid for the acquisition.
British Tech Industry Challenges
Reflecting on the state of the British tech industry, Toon pointed out that British pension funds’ historical reluctance to invest in fast-growing startups has been a barrier to growth. “There’s a massive opportunity here, but a lot of structural issues still need to be addressed,” he said. “While some of our funding came from the UK, the majority was sourced from other regions. That’s a reality we need to change moving forward.”
