- Japan’s SoftBank Group has acquired UK-based AI chipmaker Graphcore, providing the resources needed for competitive growth in the AI sector.
- With Graphcore’s struggle for funding, this acquisition highlights the UK’s failure to support its tech innovators, revealing a critical weakness in British investment culture.
OUR TAKE
The British tech industry faces significant structural challenges, with local investors historically hesitant to bet on fast-growing startups. This hesitance stifles innovation and forces the UK companies’ brightest prospects to seek refuge under the wings of international conglomerates. It is time for the UK to make a radical shift in its structure and plan for its tech development.
–Ashley Wang, BTW reporter
What happened
Japan’s SoftBank Group has officially acquired UK-based AI chipmaker Graphcore, putting an end to long-standing speculation about the company’s future. The specific number of the deal has not been disclosed. Nigel Toon, Graphcore’s CEO, said at a media briefing on last Thursday expressed optimism about the acquisition, stating it would provide the resources needed for competitive growth in the AI sector.
Graphcore, once seen as a rival to Nvidia, struggled to secure the necessary funding and faced mounting losses, including a forced exit from China due to US export regulations. Following staff cuts of 494 employees and operational closures in several countries, a filing published last year showed Graphcore needed more cash to break even.
SoftBank was famous for its previously acquired Arm, a global leader in CPU technology, for $31 billion. Now, Arm is worth close to $200 billion. SoftBank’s investments in Graphcore show a promising future for the company. “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,” said Toon.
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Why it’s important
The acquisition is significant for Graphcore. As a subsidiary of SoftBank, Graphcore is poised to enhance its role in the burgeoning AI hardware market, crucial for advancing technologies such as artificial general intelligence (AGI). This strategic partnership could provide the necessary momentum for Graphcore to realise its potential in an increasingly competitive field.
However, it also poses some worries just as Toon mentioned “If you look at where our money came from, some of it came from the UK, but the majority of it came from other regions. That’s the reality of it, and that’s the piece that we’re going to need to fix, going forward.”
SoftBank’s acquisition of Graphcore is a stark reminder of the UK’s persistent failure to support its tech innovators. Once hailed as a potential rival to Nvidia, Graphcore’s struggle to secure essential funding reveals a critical weakness in British investment culture that is unwilling to invest in fast growing startups. The UK is, once again, losing a homegrown gem to foreign ownership. This deal underscores an urgent need for British pension funds and investors to wake up and back the country’s tech visionaries.
