SoftBank Group Acquires British AI Chipmaker Graphcore

As the interest in artificial intelligence (AI) and generative artificial intelligence (GenAI) picks up, numerous businesses are looking to enter the industry.

This includes finding a presence in more than just building AI-powered tools but also manufacturing cutting-edge and advanced infrastructure.

This includes SoftBank Group Corp., the Japanese multinational investment holding company, which recently made big moves in the sector. This included investing in GenAI-focused startup Perplexity, forming a new healthcare joint venture and leading a $1 billion funding round for self-driving and AI company Wayve.

Now, the company is looking to dive deep into the AI infrastructure sector, with its latest deal with British semiconductor company and AI chip manufacturer Graphcore.

So, what did the two companies reveal about the deal? Let’s explore!
 

What Did SoftBank And Graphcore Announce?

 

• Through a blog post published on its website, Graphcore announced that it was acquired by SoftBank Group Corp.

• As per the release, Graphcore will become a wholly owned subsidiary of SoftBank.

• Furthermore, it will continue to operate under the name Graphcore and its headquarters will remain in Bristol, England.

• As a leading employer in the UK’s high-tech economy, the company will also continue investing towards creating high-skilled jobs across a wide range of disciplines.

• This also means that the company will retain its other offices in England, located in Cambridge and London, as well as offices outside the country, which include Gdansk in Poland and Hsinchu in Taiwan.

• While the terms of the deal haven’t been disclosed, full regulatory approval has already been granted.

• “We have agreed with SoftBank that we’re not going into the details of the deal; whether anything comes out in the future, we’ll see,” said the company’s CEO, Nigel Toon, who expressed that the move would have a positive outcome for most.

• However, he did clarify that the rumored $500 million that has been making news reports over the past few months was an inaccurate number.

 

How Does The Move Help Graphcore?

 

• In the last few years, Graphcore has been considered a rival to industry leader NVIDIA, a company that recently topped the charts of most valuable companies by market capitalization.

• Graphcore even held a valuation of $2.77 billion at the end of 2020, after it had raised around $700 million in the beginning. However, in 2023, the company published a filing that revealed it needed more funding just to break even.

• This was after the company cut its workforce by 20% reducing its total workforce to 494 employees and winding down its offices in Japan, Norway and South Korea.

• Essentially, this move would help the company get the resources it would need to challenge global players.

• Toon, who will retain his position at the company, further mentioned, “This is a level of investment that is utterly massive. Graphcore, as a modestly-sized company compared to those we're competing with, has actually managed to go toe-to-toe and build world-class technology.”

 

What Did SoftBank And Graphcore Executives Say?

 

• Nigel Toon, CEO and Co-founder of Graphcore, said, “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.”

• [Contd.] “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.”

• [Contd.] “In SoftBank, we have a partner that can enable the Graphcore team to redefine the landscape for AI technology.”

• Vikas J. Parekh, Managing Partner at SoftBank Investment Advisers, said, “Society is embracing the opportunities offered by foundation models, generative AI applications and new approaches to scientific discovery.”

• [Contd.] “Next generation semi-conductors and compute systems are essential in the AGI journey, we’re pleased to collaborate with Graphcore in this mission.”

Given SoftBank Group's impressive portfolio of acquired companies and investments across various startups, the move sets the company up in a promising position to enter the semiconductor industry and capture a good market share of it.

Do you think it will be able to beat existing competitors? Do you think its rivals need to make similar moves?

Let us know in the comments below!