British AI chip company Graphcore, once seen as a potential rival to Nvidia, has been acquired by SoftBank, a Japanese conglomerate.
The acquisition amount has not been disclosed but is believed to be significantly less than Graphcore’s £2 billion valuation from a 2020 financing round.
Nigel Toon, CEO of Graphcore, described the acquisition as a strong endorsement of their team in an interview with the BBC.
However, concerns have been raised about the UK’s ability to foster companies that can compete with major players in the AI chip market.
This acquisition follows SoftBank’s controversial purchase of Arm, another British chip designer, in 2016.
Technology analyst Ben Barringer from Quilter Cheviot criticized the acquisition, calling it “another bitter blow” to UK financial markets. He emphasized London’s quest for a substantial tech listing to enhance its status as a global financial hub.
Science Secretary Peter Kyle welcomed the acquisition as providing certainty for Graphcore and its employees but noted it highlights ongoing efforts needed to bolster the UK’s attractiveness for starting and scaling businesses.
Graphcore will operate as a subsidiary of SoftBank, maintaining its headquarters in Bristol with its current CEO remaining in place.
The deal is seen as a positive step for the UK in attracting new investments and driving growth, crucial in the current economic landscape.
Graphcore, founded in 2016 and known for its advanced Colossus series computer chips, faced challenges with declining sales since its peak valuation.
Despite setbacks, industry experts remain optimistic about Graphcore’s potential, especially with the backing of SoftBank, which could provide the necessary capital to compete effectively in the AI sector.
