Japanese conglomerate SoftBank has purchased Graphcore, a British AI chip firm once seen as a potential rival to Nvidia, the market leader.
The acquisition amount hasn’t been disclosed, but it’s believed to be significantly less than the £2 billion valuation Graphcore held in 2020.
Nigel Toon, Graphcore’s head, described the deal as a strong endorsement of their team. However, the acquisition raises concerns about the UK’s capability to nurture firms that can compete with industry giants in the rapidly growing AI chip market.
This move isn’t new for SoftBank, which previously acquired another UK chip designer, Arm, in 2016, sparking controversy.
Technology analyst Ben Barringer expressed disappointment over Graphcore’s sale, noting its impact on UK financial markets.
Despite this, Science Secretary Peter Kyle welcomed the deal as ending uncertainty for Graphcore and its employees, but also stressed the need for the UK to enhance its environment for business growth.
Nigel Toon emphasized that the acquisition demonstrates UK firms can compete globally in tech, despite facing larger competitors with more resources. He intends to continue leading Graphcore under SoftBank’s ownership, anticipating new hires in the UK. The company will operate as a subsidiary but remain headquartered in Bristol.
Regarding the financial aspects, reports suggest the acquisition price is around $500 million (£390 million).
Toon acknowledged the fluctuating valuations in the tech sector but expressed optimism that the deal with SoftBank will bring significant investment and advancement opportunities for Graphcore.
Founded in 2016, Graphcore’s Colossus series of computer chips enable robust processing capabilities, though it has encountered challenges such as slowing sales post-2020 and office closures in 2022.
Despite setbacks, analysts like Dan Ridsdale from Edison Group view the acquisition positively, seeing potential for Graphcore to contribute as a competitor in AI beyond Nvidia’s dominant position in Generative AI.
Credit : BBC
https://www.bbc.com/news/articles/c3gd1n5kmy5o