Graphcore sells assets and seeks to raise $500 million

Graphcore sells assets and seeks to raise $500 million is profiled by BTW Media because published evidence links it to internet infrastructure, governance, operational dependencies, or market visibility.

• Graphcore, often referred to as the “British version of NVIDIA,” faced a 46% revenue decline in 2023, exacerbating its losses, according to The Telegraph.
• Struggling to secure funding from investors, Graphcore is now seeking outside investors, potentially offering significant shares for capital injection, with OpenAI, SoftBank Group, and Arm among the potential buyers.
• Despite its setbacks, Graphcore, founded in 2016 and known for its Intelligence Processing Unit (IPU), continues to navigate challenges, including a significant reduction in its presence in the Chinese market.

The AI boom has seen stocks of companies like NVIDIA and Arm soar, but amid the prosperity, there are also many ‘drowning’ entities, with Graphcore, dubbed the ‘British version of NVIDIA,’ clearly among them. According to The Telegraph, Graphcore saw a 46% drop in revenue in 2023, further widening its losses.

In October last year, Graphcore hoped to attract funds from investors to replenish operating capital and offset losses, but negotiations failed.

The latest news suggests Graphcore is seeking investors outside the UK and is prepared to relinquish a large number of shares in exchange for funding. Potential buyers reportedly include OpenAI, Japan’s SoftBank Group, and Arm, with Graphcore planning to raise over $500 million.

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The transfer of assets needs approval from UK authorities

Transferring assets to foreign investors by Graphcore, for security reasons, requires approval from UK authorities. UK processor architecture developer Arm has been mentioned as a potential buyer, but representatives deny any negotiations with Graphcore.

Graphcore announced its withdrawal from the Chinese market in November 2023, deciding to significantly reduce its business in China.

Founded in 2016 by Simon Knowles and Nigel Toon, Graphcore primarily develops the Intelligence Processing Unit (IPU), a new processor dedicated to AI computing, to help accelerate the development of machine intelligence products and services.

Nigel Toon serves as the CEO of the company, while Simon Knowles is the co-founder, CTO, and executive vice president. This co-founder is a serial entrepreneur and longtime friend, having founded chip companies in the past, eventually selling them to Broadcom and NVIDIA.

Graphcore’s revenue in 2022 dropped from $5 million to $2.7 million. The company’s pre-tax losses increased by 11% compared to the same period last year, reaching $204.6 million, with year-end cash and short-term investments totaling $157 million.