British artificial intelligence (AI) chip firm Graphcore, once seen as a potential rival to market leader Nvidia, has been acquired by Japanese conglomerate Softbank. The deal, whose financial details have not been disclosed but are estimated to be significantly less than Graphcore’s £2bn valuation in 2020, has raised questions about the UK’s ability to compete in the booming AI chip market.
Graphcore’s CEO, Nigel Toon, described the acquisition as a “tremendous endorsement” of the company’s team, while technology analyst Ben Barringer called it a “bitter blow” to UK financial markets. The Science Secretary Peter Kyle, however, welcomed the end of uncertainty for Graphcore and its employees but acknowledged the need for the UK to improve its business environment.
Despite the sale, Toon remains optimistic about Graphcore’s future, stating that the company has the potential to compete with big tech players. He emphasized the positive impact of the deal on the UK’s growth agenda and announced plans to hire new staff in the company’s UK offices.
Founded in 2016, Graphcore has faced challenges in recent years, including slowing sales and office closures. The company’s struggles led major investor Sequoia Capital to write off the value of its stake in 2023. Despite this, industry experts believe that the acquisition by Softbank could provide Graphcore with the capital needed to remain competitive in the AI market.
Dan Ridsdale, head of technology at Edison Group, sees the deal as a positive development for UK tech and Graphcore, highlighting the need for viable competitors to Nvidia in the AI space. With Graphcore now under Softbank’s umbrella but maintaining its headquarters in Bristol, the future looks promising for the company as it seeks to make its mark in the AI chip market.
