Bristol-based AI chipmaker Graphcore bought by SoftBank
The boss of the UK computer chipmaker hailed the deal as a ‘tremendous endorsement’ of its work.
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Bristol-based artificial intelligence (AI) firm Graphcore has been bought by Japanese investment giant SoftBank in its latest move to cash in on the next-generation technology.
The boss of the UK computer chipmaker hailed the deal as a “tremendous endorsement” of its work.
The companies did not disclose the value of the acquisition. Graphcore was valued at 2.8 billion dollars (£2.2 billion) in 2020 after raising hundreds of millions of dollars from investors.
However, it has struggled financially and recorded a pre-tax loss of 205 million US dollars (£159 million) in 2022, and sales of just 2.7 million US dollars (£2.1 million) – the most recent year for publicly-available financial results.
The company said it had been hit by challenges in the wider economic environment which resulted in weaker demand for hardware sales, and led it to shut down its branches in Norway, Japan and South Korea, and trim the number of staff it employed in the UK and US.
Graphcore was founded in 2016 by Nigel Toon and Simon Knowles, and saw itself as taking on American tech giant Nvidia with its AI chips.
Nvidia briefly overtook Microsoft as Wall Street’s most valuable stock last month.
Mr Toon, also Graphcore’s chief executive, said SoftBank’s acquisition was a “tremendous endorsement of our team and their ability to build truly transformative AI technologies at scale, as well as a great outcome for our company”.
“There remains much to do to improve efficiency, resilience, and computational power to unlock the full potential of AI.
“In SoftBank, we have a partner that can enable the Graphcore team to redefine the landscape for AI technology.”
The company designs and makes processers and software tools that support new developments in machine intelligence.
It also has UK offices in Cambridge and London.
The acquisition will add to SoftBank’s portfolio of tech and AI-focused businesses.
In 2016, it acquired Arm, a Cambridge-based technology firm that designs chips for most devices including phones, tablets and digital TVs.
Arm launched its shares on the US stock market last year, but SoftBank retained a nearly 90% stake in the firm.
Derren Nathan, head of equity research at Hargreaves Lansdown, said it was “somewhat disappointing” that Graphcore has been snapped up by the Japanese investment group.
He said: “Graphcore’s commercial traction has been underwhelming but its Intelligent Processing Units are claimed to have some significant advantages over Nvidia when it comes to training AI models.
“That remains to be seen, but this is a hot space and it’s somewhat disappointing to see British innovation move to overseas ownership.
“In days of yore this would have been a prime candidate for the flotation on London’s Alternative Investment Market, but the risk appetite in the London market has all but dried up.”