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AI chipmaker Graphcore to become part of SoftBank structure
Japanese investment holding company SoftBank has announced the acquisition of Graphcore. Graphcore is a leading chip manufacturer in the UK. Its activities focus on chips for training artificial intelligence models. The deal is worth around US$600 million.
SoftBank’s acquisition of Graphcore is not its first attempt to enter the UK technology market. In 2016, the bank bought Arm, which also develops semiconductor products. In the case of Graphcore, the purchase is valued at less than the total amount of funding the company has raised, which is around US$700 million.
Graphcore will continue to operate under its brand. It will also retain its headquarters in Bristol and offices in the UK, Poland and China. According to CEO Nigel Toon, the deal with SoftBank is an essential step in the company’s development. The holding company’s support will allow the company to strengthen its work on new chips for AI. Technology development in this area is crucial, given the ever-increasing demand for semiconductors. Tun stressed that the AI sector has only tapped a small fraction of its potential. This represents a huge opportunity for both AI developers and chip manufacturers.
Company overview
Graphcore provides products for the training and operation of artificial intelligence models. The company’s products include:
- processing blocks, which are accelerators for AI workloads;
- a software stack that enhances the efficiency of the company’s chips.
In addition, Graphcore has a reputation for being at the cutting edge of its technology. In 2020, its GPU outperformed Nvidia’s A100 chip. Another of the company’s developments halved a workload’s processing time.
Despite technological innovation, Graphcore’s overall business faces challenges. The company has long been unable to achieve profitability and has been in crisis for several years. The figures bear this out:
- revenue in 2022 was US$2.7 million;
- 46% lower than the 2021 results;
- operating expenses were nearly US$207 million.
Since 2023, the company’s revenues have increased, although they remain quite modest.
Still, SoftBank sees a lot of potential in Graphcore. The company’s technologies are relevant at a time when interest in generative AI applications is growing rapidly. In addition, progress requires new solutions, which the manufacturer can provide with SoftBank’s support. The investment will help scale the UK business. Strengthening research activities and creating new manufacturing facilities could be key areas. This approach will help Graphcore’s competitiveness in both local and global markets.