FILE PHOTO: Graphcore logo is seen near computer motherboard in this illustration taken January 8, 2024. REUTERS/Dado Ruvic/Illustration/File Photo
LONDON (Reuters) - Japan's SoftBank Group has bought artificial intelligence chipmaker Graphcore for an undisclosed sum, ending long-running speculation over the company's future.
Once touted as a rival to Nvidia, which has seen its own valuation skyrocket thanks to soaring demand for AI computer chips, Britain's Graphcore has struggled to secure the investment needed to compete.
Valued at $2.77 billion at the end of 2020, a filing published last year revealed Graphcore needed more cash to break even, after cutting its headcount by a fifth to 494 employees, and shutting down operations in Norway, Japan, and South Korea.
Speaking at a media briefing on Thursday, cofounder and CEO Nigel Toon said the SoftBank deal would provide Graphcore with the resources needed to compete at a global level, but conceded the company had faced difficulties.
"The piece that surprised us was the speed at which this has taken off, and the scale that is involved," Toon said.
"This is a level of investment that is utterly massive. Graphcore, as a modestly-sized company compared to those we're competing with, has actually managed to go toe-to-toe and build world-class technology."
Toon, who will stay on in his role, declined to comment when asked how much SoftBank had paid for the company.
Reflecting on the state of the British tech industry, Toon cited British pension funds' historic unwillingness to invest in fast-growing startups as a barrier to growth.
"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."
Asked about a potential team-up with Arm Holdings, the leading chip designer also owned by SoftBank, Toon said Graphcore would work with partners across its parent company's portfolio.
(Reporting by Martin Coulter; Editing by Keith Weir)
