- British AI chip firm Graphcore, once valued at $2.58 billion, has been acquired by SoftBank for a reported $500 million.
- Despite initial struggles and international office closures, the acquisition by SoftBank brings new investment to Graphcore, which plans to expand its workforce while remaining headquartered in Bristol.
OUR TAKE
SoftBank’s acquisition of Graphcore highlights the UK’s struggle to maintain tech giants, raising concerns about domestic innovation support. While the deal brings vital capital, it underlines the volatility of the tech sector and questions the UK’s ability to nurture independent, competitive startups on the global stage.
–Jasmine Zhang, BTW reporter
What happened
British AI chip firm Graphcore, once seen as a rival to Nvidia, has been acquired by Japanese conglomerate SoftBank for a reported $500 million (£390 million), significantly less than its 2020 valuation of £2 billion ($2.58 billion).
Graphcore head Nigel Toon described the deal as a “tremendous endorsement” and emphasised it brings new investment to the UK. However, this acquisition raises concerns about the UK’s ability to develop tech giants capable of competing globally. Despite its initial promise, Graphcore faced declining sales and closed several international offices.
Technology analyst Ben Barringer called the acquisition “another bitter blow” to the UK’s financial markets. Nonetheless, the deal is viewed positively by some, as it secures substantial capital for Graphcore to continue competing in the AI industry. The firm will remain headquartered in Bristol, with plans to expand its workforce under SoftBank’s ownership.
Also read: SoftBank shares rise on $1.86B debt offering as CEO talks up AI
Also read: UK leads Europe in GenAI startups, Accel reveals
Why it’s important
SoftBank’s acquisition of British AI chip firm Graphcore is a stark reminder of the UK’s struggle to foster tech giants capable of competing globally.
Once hailed as a potential rival to Nvidia, Graphcore’s sale for a fraction of its 2020 valuation underscores the volatility and brutal competitiveness of the tech sector. This deal, while injecting much-needed capital, also raises uncomfortable questions about the UK’s innovation ecosystem. Are they nurturing their startups only to see them snapped up by foreign giants?
The fact that Graphcore, despite its groundbreaking technology, couldn’t maintain its independence reflects a broader issue: the lack of substantial homegrown investment and support. For a nation striving to be a global tech leader, this trend is concerning. However, there’s a silver lining. SoftBank’s investment might just provide the boost Graphcore needs to truly compete on the world stage.
