Japan’s SoftBank Group has acquired artificial intelligence chipmaker Graphcore for an undisclosed sum following substantial doubts around the company’s future.
Once hailed as a competitor to Nvidia (NVDA.O), which has witnessed a sharp increase in valuation due to the growing market for artificial intelligence (AI) computer processors. Britain’s Graphcore has had difficulty raising the capital required to stay competitive. Graphcore, which was valued at $2.77 billion at the end of 2020, needed additional funding to break even, according to a document that was made public last year. This was after the company closed down offices in South Korea, Japan, and Norway and reduced its workforce by a fifth to 494 people.
Cofounder and CEO Nigel Toon acknowledged that challenges had been experienced by the company but stated that the SoftBank acquisition will provide Graphcore with the tools it needs to compete on a global scale during a media briefing on Thursday. “The piece that surprised us was the speed at which this has taken off and the scale that is involved,” Toon stated. “This is an absolutely enormous amount of investment. Graphcore, although a smaller company than its competitors, has managed to develop cutting-edge technology on par with them.”
When questioned about the amount SoftBank had spent to acquire the company, Toon, who will continue in his position, declined to comment. In his reflections on the current situation of the British tech sector, Toon pointed to a historical hurdle to growth: the reluctance of British pension funds to engage in rapidly expanding firms. “There’s a massive opportunity here, but there’s a lot of structural things that still need to be fixed,” he stated. “If you look at where our money originated from, the UK was the source of some of it, but other places accounted for the rest. It is the situation as it really is, and it is the aspect that we will need to address moving forward.
When asked about a possible collaboration with Arm Holdings, the top chip designer that is also a SoftBank subsidiary, Toon replied that Graphcore will collaborate with partners throughout the portfolio of its parent firm.
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