Japan’s SoftBank Acquires AI Chip Start-up Graphcore

SoftBank Group has purchased another British chip firm, with the acquisition of Bristol-based Graphcore Ltd in order to bolster the growing focus on AI processors.

Graphcore announced on Thursday that it had been acquired by SoftBank Group Corp, and will be become “a wholly owned subsidiary of SoftBank and will continue to operate under the Graphcore name.”

The Graphcore acquisition is not surprising. In April this year reports had emerged that SoftBank was in talks to acquire Graphcore, as the Japanese conglomerate sought to broaden its tech investments.

Graphcore acquisition

Graphcore develops accelerators for AI and machine learning and has previously introduced a massively parallel Intelligence Processing Unit (IPU) that holds the machine learning model inside the processor itself.

This type of technology puts it into competition with the likes of Nvidia, which of course dominates the AI-chip market.

Since it was founded in 2016, Graphcore has raised hundreds of millions of dollars in funding from big name investors.

But according to media reports it began to struggle in 2022 after recording a significant drop in revenue, which prompted some job losses.

Facebook owner Meta Platforms reportedly acquired the AI networking technology team from Graphcore in early 2023.

Although Graphcore is based in Bristol, it has offices in London, Gdansk (Poland) and Hsinchu (Taiwan), as well as the UK’s ‘silicon fen’ in Cambridge.

Financial terms of the deal were not disclosed, but various media reports have mooted a purchase price of between $500m to $600m.

SoftBank’s acquisition of Graphcore is said to be under review by the UK’s Business Department’s investment security unit.

Tremendous endorsement

Graphcore’s CEO has welcomed the acquisition by SoftBank, and noted the ongoing demand for AI computing.

“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,” said Graphcore co-founder and CEO Nigel Toon. “Demand for AI compute is vast and continues to grow.”

“There remains much to do to improve efficiency, resilience, and computational power to unlock the full potential of AI,” said Toon. “In SoftBank, we have a partner that can enable the Graphcore team to redefine the landscape for AI technology.”

“Society is embracing the opportunities offered by foundation models, generative AI applications and new approaches to scientific discovery”, added Vikas J. Parekh, Managing Partner at SoftBank Investment Advisers. “Next generation semi-conductors and compute systems are essential in the AGI journey, we’re pleased to collaborate with Graphcore in this mission.”