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SoftBank Acquires AI Chipmaker Graphcore to Expand AI Network

Author

Alicia Shapiro
July 12, 2024 • Estimated Reading Time: 3 minutes

Illustration of SoftBank's acquisition of British AI chipmaker Graphcore, featuring elements representing AI technology such as computer chips and neural network graphics. The logos of SoftBank and Graphcore are prominently displayed, with symbols of integration and expansion in the background, emphasizing the strategic nature of the acquisition and the merging of AI expertise and resources

SoftBank Acquires AI Chipmaker Graphcore to Expand AI Network

Japan's SoftBank Group has purchased the British artificial intelligence chipmaker Graphcore for an undisclosed amount, ending long-standing speculation about the company's future. Graphcore, once seen as a potential competitor to Nvidia, has faced challenges in securing necessary investments to keep up with the increasing demand for AI chips.

Graphcore's Challenges and Acquisition Details

At the end of 2020, Graphcore was valued at $2.77 billion. However, a recent filing revealed the company required additional funds to reach profitability. This financial strain led to a reduction of its workforce by 20% to 494 employees and the closure of operations in Norway, Japan, and South Korea.

Now, as a wholly owned subsidiary of SoftBank, Graphcore will continue operating under its brand name, with the co-founders remaining as CEO and CTO, and its headquarters staying in Bristol. No layoffs are anticipated due to this acquisition. In fact, Graphcore plans to expand its workforce to support growth.

Benefits for SoftBank

The acquisition is a strategic addition to SoftBank's extensive portfolio of AI investments. Over the past year, SoftBank has invested more than $8.9 billion in AI companies, aiming to solidify its position as a leader in the AI industry.

Statements from Graphcore Leadership

Reflecting on the British tech sector, Graphcore CEO Toon mentioned that British pension funds' historical reluctance to invest in rapidly growing startups has been a significant hurdle. He stated, "There's a massive opportunity here, but there's a lot of structural things that still need to be fixed," he said. "If you look at where our money came from, some of it came from the UK, but the majority of it came from other regions. That's the reality of it, and that's the piece that we're going to need to fix, going forward."

Future Collaborations

Regarding potential collaborations with Arm Holdings, another leading chip designer owned by SoftBank, Toon said that Graphcore will work with various partners within SoftBank's portfolio.