SoftBank has announced its acquisition of Graphcore, a prominent British AI chipmaker, making Graphcore a wholly-owned subsidiary of SoftBank.
This acquisition, valued at approximately $600 million, marks SoftBank's latest venture into the UK tech industry. In 2016, SoftBank notably acquired British chip designer Arm in a much larger deal. However, the Graphcore acquisition comes at a lower valuation than the total funding the company had raised, which was around $700 million.
Graphcore will retain its name and continue to operate from its headquarters in Bristol, UK, while also maintaining its offices in Cambridge, London, Gdansk, and Hsinchu. This move underscores SoftBank's commitment to preserving Graphcore’s established operations and presence.
Nigel Toon, co-founder and CEO of Graphcore, expressed his enthusiasm: “This is a tremendous endorsement of our team and their ability to build truly transformative AI technologies at scale, as well as a great outcome for our company.”
Toon highlighted the growing demand for AI computing and the ongoing efforts needed to enhance efficiency, resilience, and computational power to fully realize AI’s potential.
Graphcore’s primary product line includes “Intelligence Processing Units” (IPUs), which are accelerators specifically designed for AI workloads, complemented by a software stack that enables developers to maximize the hardware's capabilities.
Graphcore's technology has received acclaim. In 2020, a Graphcore device outperformed an Nvidia A100 GPU, and in another instance, its hardware significantly reduced the time required for a GPU-based drug discovery workload.
Despite these technological achievements, Graphcore has faced challenges in generating substantial revenue and achieving profitability. In 2022, the company reported revenue of just $2.7 million, a 46 percent decrease from the previous year, while operating expenses reached $206.8 million.
Vikas J. Parekh, Managing Partner at SoftBank Investment Advisers, commented: “Society is embracing the opportunities offered by foundation models, generative AI applications, and new approaches to scientific discovery. Next-generation semiconductors and compute systems are essential in the AGI journey. We’re pleased to collaborate with Graphcore in this mission.”
Parekh’s mention of AGI (Artificial General Intelligence) suggests that SoftBank views Graphcore’s technology as a crucial element in developing advanced AI systems capable of human-level intelligence across various tasks.
Graphcore has established itself as a leading employer in the UK’s high-tech sector, and the company has pledged to continue investing in creating high-skilled jobs across multiple disciplines.
The acquisition by SoftBank is expected to provide Graphcore with significant resources and opportunities for growth. It also highlights the intensifying competition in the AI chip market, where companies like NVIDIA, Intel, and AMD are striving for dominance.
As AI continues to integrate into various economic and societal sectors, the demand for specialized AI hardware is expected to rise. Graphcore’s integration into SoftBank’s portfolio positions both companies to capitalize on this growing trend.
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