SoftBank buys Graphcore, targets further AI investments

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SoftBank founder Masayoshi Son said earlier this year that AI will be SoftBank’s ‘next big bet’ when it comes to technology

This week, Japanese conglomerate SoftBank has announced the acquisition of struggling UK-based AI chipmaker Graphcore.

Official financial details have not been disclosed, but anonymous sources speaking to the Financial Times valued the deal at $600 million.

Graphcore creates specialised AI chips, known as intelligence processing units, which can be used to train and operator AI large language models.

This is the same type of chip technology that has seen rival chip company Nvidia soar to around $3 trillion earlier this year.

Unlike Nvidia, however, Graphcore has struggled significantly to commercialise its technology. Valued at $2.8 billion back in 2020, Graphcore has since failed to sell its products at scale, noting “lower hardware sales to key strategic customers”. In 2022, the company recorded just $2.7 million in sales, 46% lower than in 2021, and booking a pre-tax loss for the year of $205 million.

As a result, 2023 saw Graphcore undertake cost cutting measures, cutting 20% of its workforce and closing its operations in Norway, Japan, and South Korea. At the time, the company said there was ‘material uncertainty’ over the company’s survival and called for fresh funding.

Now, as part of SoftBank, Graphcore will reportedly have all the resources it needs to return to full force.

“Demand for AI compute is vast and continues to grow,” said Graphcore’s co-founder and chief executive, Nigel Toon. “There remains much to do to improve efficiency, resilience, and computational power to unlock the full potential of AI. In SoftBank, we have a partner that can enable the Graphcore team to redefine the landscape for AI technology.”

SoftBank itself has been stepping up its focus on AI for over a year now, with Son saying earlier this year that “realising ASI (Artificial Superintelligence)” was “his only focus”. He has also said the company is ready to invest roughly $9 billion a year in AI and is prepared for largescale dealmaking in the future.

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