British chipmaker Graphcore has been bought by Japan’s SoftBank for an undisclosed sum, safeguarding the company's future.
The company will become a wholly-owned subsidiary of SoftBank and will continue to operate under the Graphcore name.
While the terms of the deal haven't been revealed, it's been estimated at more than $600 million - below the $700 million previously raised in venture capital, and well under its $2.5 billion valuation in 2020.
Nigel Toon, co-founder and CEO of Graphcore, described the deal as a “tremendous endorsement” for the company and said the acquisition is a “great outcome”.
"Demand for AI compute is vast and continues to grow,” he said. “There remains much to do to improve efficiency, resilience, and computational power to unlock the full potential of AI. In SoftBank, we have a partner that can enable the Graphcore team to redefine the landscape for AI technology."
The Bristol-based company, which also has offices in Cambridge, London, Gdansk, and Hsinchu, focuses on the AI market. Its key product is a processor dubbed an Intelligence Processing Unit (IPU), with an architecture designed specifically for AI, and claimed to be more efficient than GPUs.
The company has experienced difficulties in recent years. In 2022, it reported revenue of just $2.7 million, marking a 46% decrease on the year before and with losses of $205 million.
It hoped to improve its position through an expansion into China, but was thwarted by US export restrictions. Last year, it warned of a 'material uncertainty' over its ability to survive and said it needed fresh funding by May this year.
Scott Constable, alliance director at Vesper Technologies, described the deal as a “watershed moment for UK tech” and a positive indicator of the strength of the country’s tech sector..
“It’s heartening to see foreign investment in British innovation, particularly outside of London," he said.
"Graphcore, along with the UK's chip design sector as a whole, is world-class, and this investment is a strong validation of this. Semiconductors are the backbone of AI, and this investment should help secure Britain’s leadership in cutting-edge chip design and innovation."
Graphcore isn't the only UK chip firm to have been bought by SoftBank. The investment giant acquired Cambridge-based Arm for £24 billion in 2016
"The AI chip sector's rapid growth has caught many by surprise, demanding massive investments," Constable said.
"With SoftBank’s extensive reach, this deal could provide Graphcore with the resources needed to compete on a global scale."
