SoftBank of Japan Buys British AI Chipmaker Graphcore

SoftBank Group bought the British company Graphcore, which makes it possible for the struggling British company to compete on a global scale, even though it has been having financial problems and has had to lay off workers.

Japan’s SoftBank Group has acquired artificial intelligence chipmaker Graphcore for an undisclosed sum, putting an end to long-running speculation about the company’s future.

Britain’s Graphcore, once regarded as a rival to Nvidia, whose valuation has skyrocketed due to soaring demand for AI computer chips, has struggled to secure the investment required to compete.

Graphcore, valued at $2.77 billion at the end of 2020, revealed in a filing last year that it needed more cash to break even after cutting its headcount by a fifth to 494 employees and closing operations in Norway, Japan, and South Korea. Nigel Toon, co-founder and CEO of Graphcore, told reporters on Thursday that the SoftBank deal would give the company the tools it needed to compete on a global level. However, he did admit that the company had faced problems.

“The piece that surprised us was the speed at which this has taken off and the scale involved,” Toon told me. “This is a truly massive investment. Graphcore, despite its small size compared to its competitors, has managed to compete and build world-class technology.”

Analyzing the British Tech Industry

Reflecting on the state of the British tech industry, Toon identified British pension funds’ historic reluctance to invest in fast-growing startups as a barrier to growth. “This presents a significant opportunity, yet numerous structural issues still require attention,” he informed reporters.

“When you look at where our money came from, you’ll notice that while some came from the United Kingdom, most came from other regions. That’s the truth, and we’ll need to adapt.”

When asked about a potential collaboration with the leading chip designer also owned by SoftBank, Toon stated that Graphcore would work with partners from across its parent company’s portfolio.