SoftBank Acquires UK AI Chip Startup Graphcore

SoftBank Acquires UK AI Chip Startup Graphcore

SoftBank Group has acquired Graphcore, the UK-based AI chip company, to bolster its AI capabilities. Graphcore's brand and operational structure will stay the same as it becomes a wholly-owned SoftBank subsidiary.

Graphcore, founded in Bristol in 2016, has been a pioneer in the field of AI hardware. The company's innovative "intelligence processing units" (IPUs) offer a distinct architecture designed specifically for AI workloads, setting them apart from traditional graphics processing units (GPUs).

The startup successfully raised $700 million from heavyweight backers like Microsoft and Sequoia Capital. However, despite its innovative technology and early promise, Graphcore has faced challenges, including missing out on major cloud deals, mounting losses, and being impacted by U.S. export rules, which forced its exit from China.

Still, with a growing demand for AI computing power, Graphcore's technology presents an efficient and powerful alternative. This acquisition by SoftBank in some ways validates Graphcore's transformative potential, but also ensures the resources and reach needed to make a lasting impact.

In a press briefing, Toon struck an optimistic tone, confirming expectations of increased headcount and no layoffs. While the financial details of the deal remain undisclosed, Toon assured that current employees and investors are pleased with the outcome.

For SoftBank, Graphcore adds firepower to its AI arsenal. Vikas J. Parekh of SoftBank Investment Advisers stressed the pivotal role of cutting-edge chips in the quest for artificial general intelligence. "Next-gen semiconductors are key to AGI," Parekh said. "We're thrilled to team up with Graphcore on this mission."

The deal has already cleared all regulatory hurdles, including the UK's National Security and Investment Act - suggesting both sides worked hard behind the scenes to address potential concerns.

Graphcore will keep its Bristol headquarters, along with offices in Cambridge, London, Gdansk, and Hsinchu. Toon and CTO Simon Knowles will also stay on for now to ensure some amount of leadership continuity.

For the UK tech scene, the deal offers both opportunity and a sobering reminder of the hurdles homegrown firms face in scaling globally. As Graphcore starts its new chapter under SoftBank, we'll see if it will help to them challenge NVIDIA's dominance in any meaningful way.

Chris McKay is the founder and chief editor of Maginative. His thought leadership in AI literacy and strategic AI adoption has been recognized by top academic institutions, media, and global brands.

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