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British artificial intelligence (AI) chip firm Graphcore – once considered a potential rival to market leader Nvidia – has been bought by a Japanese conglomerate.<\/p>\n
Softbank has not disclosed how much it paid – but it is thought to be considerably less than the \u00a32bn the UK company was valued at after a financing round in 2020.<\/p>\n
Graphcore head Nigel Toon told the BBC it was “a tremendous endorsement of our team”. <\/p>\n
However, the deal is likely to raise questions about the UK’s ability to develop firms which can take on the biggest players in the booming AI chip market.<\/p>\n
It is not the first time Softbank has acquired a promising UK start-up – in 2016 it controversially acquired another British chip designer, Arm<\/a>.<\/p>\n Ben Barringer, technology analyst at Quilter Cheviot, said it was “another bitter blow” to UK financial markets to see Graphcore follow suit.<\/p>\n “It comes at a time when London is looking for a blockbuster tech listing to reinvigorate its reputation as a global financial centre,” he said.<\/p>\n The Science Secretary Peter Kyle called the deal a “welcome end to the uncertainty that has faced Graphcore and its employees”.<\/p>\n But he also admitted it was a “reminder of the important work that needs to be done” to make the UK “the best place to start and grow a business.\u201d<\/p>\n Mr Toon said he believed the deal showed UK firms could compete with big tech, claiming Graphcore went “toe to toe with the largest companies in this space with a much smaller team with much less capital”.<\/p>\n “It’s really positive for the UK, bringing new investment here to help drive the growth agenda which as we all heard recently is so important.”<\/p>\n He said he would stay on as head of the company, and the move would lead to Graphcore hiring new staff in its UK offices.<\/p>\n The firm will now be a subsidiary under SoftBank but will remain headquartered in Bristol.<\/p>\n<\/div>\n Though the sale price has not been made public, it has been reported<\/a> that it is $500m (\u00a3390m).<\/p>\n Mr Toon said he would not “go into any of the speculation” around the sums of money involved.<\/p>\n But he did concede that the valuation of tech firms in general “have been up and down”.<\/p>\n “We’ve certainly seen a lot of other companies, their values have dropped and investors have taken appropriate cautious decisions about how they value investments on their books. <\/p>\n “Hopefully, as a result of this deal, we’ll see big investment and huge progress for Graphcore together with SoftBank.”<\/p>\n Graphcore was founded in 2016 by Mr Troon and Simon Knowles – its computer chips, the Colossus series, allow for powerful computer processing.<\/p>\n However it has struggled with slowing sales since its bumper 2020 valuation, and announced in 2022<\/a> that it had closed offices in Norway, Japan and South Korea.<\/p>\n