Graphcore, a prominent UK artificial intelligence (AI) chip firm, has recently been acquired by the Japanese conglomerate, Softbank. The financial details of the acquisition have not been publicly disclosed, but it is believed to be significantly lower than Graphcore’s 2020 valuation of £2bn. Nigel Toon, the company’s CEO, has expressed confidence in the acquisition, describing it as a “tremendous endorsement” of their team.
The acquisition has raised concerns about the UK’s ability to support firms capable of competing in the rapidly expanding AI chip market. The previous acquisition of another British chip designer, Arm, by Softbank in 2016 has also sparked similar worries. Ben Barringer, a technology analyst, has characterized the acquisition as “another bitter blow” to the UK financial markets.
Science Secretary Peter Kyle has welcomed the resolution of the uncertainty faced by Graphcore and its employees due to the deal. However, he has recognized the need for further initiatives to create an optimal environment for the establishment and growth of businesses in the UK.
CEO Nigel Toon remains optimistic about the UK’s ability to rival major tech industry players. He has emphasized the positive impact of the acquisition, anticipating new investments in the UK and advancement in the growth agenda.
While the exact sale price remains undisclosed, reports suggest it to be around $500m (£390m). Mr. Toon has refrained from commenting on the speculation surrounding the figures, acknowledging the volatility of tech firms’ valuations. He is hopeful that the acquisition will bring significant investment and progress for Graphcore under Softbank’s ownership.
Founded in 2016 by Nigel Toon and Simon Knowles, Graphcore is recognized for its Colossus series of computer chips, which enable high-performance computer processing. Despite its initial success, the company experienced a decline in sales after its 2020 valuation, resulting in the closure of several international offices.
At one point, Graphcore was positioned as a potential competitor to Nvidia in the AI space. Despite facing setbacks, industry experts such as Dan Ridsdale, head of technology at Edison Group, view the acquisition as an opportunity for Graphcore to gain the capital necessary to re-establish itself as a viable competitor in the AI industry.