Image source, Getty Images
- author, Tom Jerkin
- Role, Technology Reporter
A Japanese group has acquired British AI chip company Graphcore – previously seen as a potential rival to market leader Nvidia.
SoftBank did not disclose how much it paid – but it is believed to be well below the £2 billion the British company was valued at after a funding round in 2020.
“This is a huge endorsement for our team,” Graphcore chief executive Nigel Toon told the BBC.
However, the deal is likely to raise questions about the UK’s ability to develop companies that can compete with the biggest players in the booming AI chip market.
Ben Barringer, technology analyst at Quilter Cheviot, said seeing Graphcore follow suit was “another bitter blow” to UK financial markets.
“This comes at a time when London is looking for a major tech listing to revitalise its reputation as a global financial centre,” he added.
Science Minister Peter Kyle said the agreement represented “a welcome end to the uncertainty faced by Grafcor and its employees”.
But he also admitted it was a “reminder of the important work that needs to be done” to make the UK “the best place to start and grow a business”.
Mr Toon said he believed the deal showed that British companies could compete with big tech firms, claiming that Graphcore “took on the biggest players in the space with a much smaller team and much less capital”.
“It’s really positive for the UK, bringing new investment here to help drive the growth agenda that we’ve all been hearing recently is so important.”
He said he would remain as chairman of the company, and that the move would see Graphcore hire new staff in its UK offices.
The company will now be a subsidiary of SoftBank Group, but will remain headquartered in Bristol.
decrease in value
Mr Ton said he would not “enter into any speculation” about the amounts of money involved.
But he admitted that the valuation of tech companies in general “has been up and down.”
“We’ve certainly seen a lot of other companies where their value has declined and investors have made appropriately cautious decisions about how to value investments on their books.
“We hope, as a result of this deal, to see significant investment and tremendous progress for Graphcore in partnership with SoftBank.”
Graphcore was founded in 2016 by Mr. Troon and Simon Knowles – and its computer chips, the Colossus series, allow for powerful computing.
However, it has suffered from slowing sales since its massive valuation in 2020, and Announced in 2022 It has closed its offices in Norway, Japan and South Korea.
This was a huge disappointment considering that at one point, Graphcore was seen as a potential competitor to Nvidia in the AI space.
Its potential rival has seen its value grow significantly, briefly this year being named the world’s most valuable company.
“I think this is really good news for the UK technology company and for Graphcore,” said Dan Ridsdale, chief technology officer at Edison Group.
“Nvidia has established a dominant position in generative AI… but there are other opportunities within AI and the industry will need competitors who can compete.
“But Graphcore will need significant capital – and it is positive that Graphcore has found an investor willing to take the risk and provide the capital to put it into the mix.”
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