SoftBank buys struggling UK chip start-up Graphcore in AI race
- It is the second UK semiconductor company that SoftBank has snapped up, and follows its 2016 takeover of Cambridge-based Arm Holdings.
SoftBank Group has acquired British semiconductor start-up Graphcore, as the Japanese firm seeks to strengthen its investments in chips and artificial intelligence.
The companies announced the deal on Friday without disclosing financial terms. Bristol-based Graphcore will operate as a SoftBank subsidiary and keep its management team, Nigel Toon, Graphcore’s chief executive officer, told reporters in a briefing.
It is the second UK semiconductor company that SoftBank has snapped up, and follows its 2016 takeover of Cambridge-based Arm Holdings, the chip designer whose technology is found in almost all of the world’s smartphones. Graphcore was frequently held up as a champion of the UK tech industry – it took part in the country’s inaugural AI safety summit last year. But Toon has been openly critical of the government’s lack of support for the industry.
Based in Bristol, Graphcore designed a new type of chip, called an IPU, meant to enable AI applications. Financing from marquee investors, including Sequoia Capital, gave the company a US$2.8 billion valuation in 2020 on the hopes that it would rival Nvidia. But the British upstart struggled to gain customers, even as the frenzy around AI sent the demand for silicon sky high.
Graphcore brought in US$2.7 million in sales on US$204.6 million in losses in 2022, according to its most recent filings. The company disclosed that it needed more money to survive. Last year, Graphcore left China, a market Toon had cited as promising.
