UK AI Chipmaker Graphcore Acquired by SoftBank
Terms of the deal remain undisclosed, but Graphcore CEO Nigel Toon views it as a positive outcome. Full regulatory approval has been granted.
UK-based chip company Graphcore has been formally acquired by Japan's SoftBank. Rumors of the deal have been circulating for some time, but neither company has confirmed the details until now. While the figure of $500 million has been reported, Graphcore co-founder and CEO Nigel Toon remains tight-lipped on the details. "We have agreed with SoftBank that we're not going into the details of the deal; whether anything comes out in the future, we'll see," Toon said.
Toon did, however, dismiss the $500 million figure as inaccurate.
When the Chips are Down
Founded in Bristol in 2016, Graphcore has developed a new kind of processor dubbed an "intelligence processing unit" (IPU), distinct from traditional graphics processing units (GPUs). IPUs are designed from the ground-up for AI workloads, with a focus on supporting large-scale parallel processing and executing complex machine learning models. Graphcore pitches its chips as a more efficient alternative to GPUs.
Graphcore had raised around $700 million since its inception, reaching a valuation just shy of $3 billion in late 2020. With big-name corporate and institutional investors like Microsoft and Sequoia, and angels such as DeepMind's Demis Hassabis and OpenAI co-founder Greg Brockman, hopes were high that Graphcore could become an AI beacon in the UK or Europe. However, AI hardware is a resource-intensive business, and Graphcore ultimately couldn't hit the heights many had hoped it could reach.
SoftBank, for its part, is no stranger to UK semiconductor companies, having previously acquired Arm for £24 billion ($31 billion) and then retained a stake as it spun Arm out as a $55 billion publicly traded company last year. Arm is now worth close to $200 billion — a sign, perhaps, that SoftBank might not be the worst bedfellow for Graphcore, as the well-financed Japanese powerhouse seeks to bolster its AI aspirations.
Toon views the sale to SoftBank as a positive outcome, with no layoffs expected across its UK, Polish, and Taiwanese hubs. In fact, he expects the company to add "quite significantly" to its headcount in the UK. Both Toon and CTO co-founder Simon Knowles will be staying put in their executive and directorship roles.
Image: Graphcore co-founder and CTO Simon Knowles
However, in most people's eyes, Graphcore hasn't fulfilled its early promise. So what happened? According to Toon, the expenditure required in the space that Graphcore operates is an order of magnitude higher than what Graphcore was able to access as an independent company.
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