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Terms of the deal weren’t disclosed, but Graphcore CEO Nigel Toon says it’s a positive outcome (for most). Full regulatory approval has been granted already.
U.K. chip companyGraphcorehas been formally acquired by Japan ’s SoftBank .
rumour of the dealhave abounded for some prison term , but prolong negotiations and regulatory approval have meant neither company has affirm anything until now . Even today , the troupe would n’t confirm the one affair most people will be wondering : How much does Nipponese transnational SoftBank economic value a startup touted as a potential rival to the mighty Nvidia in the AI chip blank ?
While the figure of $ 500 million has been bandy around in various reports for month , in a military press briefing early Thursday sunup , Graphcore co - founder and CEONigel Toonremained coy on the details . “ We have agree with SoftBank that we ’re not going into the details of the deal ; whether anything come out in the future , we ’ll see , ” Toon said .
Toon did say , however , that the $ 500 million figure was inaccurate . Make of that what you will .
When the chips are down
establish out of Bristol in 2016 , Graphcore has devised a raw kind of C.P.U. dubbed an “ intelligence processing building block ” ( IPU ) , distinguishable to the kinds of graphics processing units ( GPU ) developed by the likes of Nvidia . While both accelerate reckoning , IPUs have a different architecture designed from the priming coat - up for AI workloads . Graphcore pitches its chips as a more efficient alternative to GPUs , with a nidus on supporting large - scale parallel processing and executing complex machine learning example , where the model and data point are tightly coupled .
Graphcore had raise around $ 700 million since its inception , reaching a valuation just timid of $ 3 billion in late 2020 . With big - name bodied and institutional investors like Microsoft and Sequoia , and saint such asDeepMind ’s Demis Hassabisand OpenAI conscientious objector - founding father Greg Brockman , hopes were high that Graphcore could be an AI beacon in the U.K. or even all of Europe . But AI hardware is a resource - intensive business organization , and Graphcore ultimately could n’t hit the giddy heights many had hoped it could reach . Itlost out on likely lucrative swarm dealswith Microsoft , while the U.K. ’s own government discount Graphcore ( despitea public plea from Toon himself ) for its new“exascale ” computer plans last year .
Graphcore has not had the serious of times of late , compounded last yearby its forced China exit due to U.S. export rules .
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Withlosses wideningand Graphcore approach four years since its last capital injection , it was increasingly vindicated that something had to befall somewhere — and an learning always seemed the most potential outcome , particularly at a time when requirement for AI hardware is at fever pitch .
SoftBank , for its part , is no unknown to U.K. semiconductor companionship , havingpreviously gain Armfor £ 24 billion ( $ 31 billion ) and then keep a stakeas it spin Armout as a $ 55 billion publicly merchandise companionship last year . weapon is now worth close to $ 200 billion — a sign , perhaps , that SoftBank might not be the high-risk bedfellow for Graphcore , as the well - financed Japanese powerhouse essay to bolster its AI aspirations with everythingfrom data centersandrobotics , to the semiconductor machine take to power the AI revolution .
Certainly , this is how the folks at Graphcore aspect matter . While those on the exterior might view the sale to SoftBank as a overlook opportunity for a U.K. or European fellowship to make an independent AI hardware goliath , Toon ’s tonicity in Thursday ’s briefing was one more of pollyannaish positivity .
For starters , Toon confirmed that he does n’t expect any layoffs as a issue of this acquisition , across its U.K. , Polish and Taiwanese hub , adding that , if anything , it will probably be tot up “ quite significantly ” to its head count in the U.K.
And significantly , both he and CTO cobalt - cofounderSimon Knowleswill be staying put both in their executive and directorship roles .
However , in most the great unwashed ’s eye , Graphcore has n’t really fulfilled its other hope . So what bechance ?
In a nutshell , the spending required in the space that Graphcore operates is an order of magnitude higher than what Graphcore was able-bodied to get at as an independent troupe .
“ Simon and I sit in a gin mill back in 2012 talking about this : AI , and the computer hardware that will be required for AI , ” Toon told TechCrunch . “ We ’ve been mean about this and what ’s necessitate for a foresightful full stop of time , and we ’ve in all likelihood been one of the other thinkers in the whole space . I think the slice that has surprise us [ most ] is the stop number at which this has all taken off , and the scale that is ask . ”
This “ scale leaf , ” Toon says , involves systems of 100,000 interconnect AI processor , networking , liquid cooling system and all the rest ; it ’s not precisely child ’s frolic , and it ’s far from inexpensive .
“ This is a layer of investing which is absolutely massive , and the composition which is really interesting here is Graphcore is a relatively modest - sized company — with child in terms of U.K. investment , but still small in term of the companies we ’re competing with — and we ’ve managed to go toe - to - toe and build world - stratum engineering . ”
Graphcore was always relatively demure in terms of headcount . For comparing , Nvidia has in the area of 30,000 employee , whereas Graphcore has around 500 . And while Nvidia has grow organically over some three decennary , Graphcore was taste to scale at a time when the post - pandemic capital markets were n’t favorable to inauguration of Graphcore ’s disposition .
“ The right result for the company here is to work intimately with a partner who ’s unforced to make these levels of investment that are require to succeed in what is going to be in all probability the most crucial marketplace in technology over the come year , ” Toon enjoin .
Time will tell whether the acquisition proves a prudent move for the company concerned , but Toon did confirmreportsthis week that some former employees ’ broth was wipe out in this great deal . This suggests that the acquisition Leontyne Price was below ( or around ) the figure it had upgrade , as investors and aged executives would be more likely to hold preferred stock pick over ex-husband - employees . Indeed , Toon affirm that he did make some money from the transaction , without disclosing how much .
Toon also stressed that for all current employee and investor , the good deal was a comparatively incontrovertible event — for those willing to hang around , at least .
“ There are a number of slipway you’re able to structure M&A deals . Sometimes that think of that former employees do n’t participate in what happens going forward , and unfortunately that ’s the case here , ” Toon say . “ We ’re sorry about that , but what I can say is , for all of Graphcore current employee , and the people who will be play with the party fit forward , this is a great outcome for all of those . [ And ] it ’s a honest result for our investor . They ’re all very well-chosen . ”
Graphcore gets the green light from regulators
Often when acquisitions of this order of magnitude are announced , there are months or even year of sustain regulative tussles . But here , SoftBank and Graphcore have gone through all the necessary antitrust and security approvals already ; as a major base troupe , a deal such as this was always start to describe scrutiny under the U.K.’sNational Security and Investment Act , which came into military group two year ago .
“ We have been through a very tight process of have all of the regulatory blessing for this pile , which is maybe why affair have been rumored for some period of time , ” Toon said . “ All the commendation are in place , in the U.S. and other places as well . ”
So that ’s it : Graphcore is now formally owned by SoftBank , control as a wholly owned subsidiary under its exist Graphcore name . The company ’s home office will remain in Bristol , with extra hubs in London and Cambridge in the U.K. , as well as offices in Gdansk ( Poland ) and Hsinchu ( Taiwan ) .
What happens next for Graphcore as a SoftBank subsidiary is up in the air , but Vikas J. Parekh , oversee partner at SoftBank Investment Advisers , stresses that Graphcore will now play a big part in its pursuit of AI riches .
“ Society is comprehend the opportunity offered by foundation modelling , procreative AI applications and new approach path to scientific uncovering , ” Parekh articulate in a press release issued to TechCrunch . “ Next - generation semiconductor and compute systems are essential in the AGI [ artificial general intelligence ] journey ; we ’re proud of to collaborate with Graphcore in this missionary station . ”
