Pioneer UK microchip maker bought by Japanese conglomerate

British artificial intelligence (AI) chip company GraphCore – once considered a rival to market leader Nvidia – has been bought by a Japanese conglomerate.

Softbank didn’t disclose how much it paid – but it’s thought to be significantly less than the £2bn the UK company is estimated to be taking after a 2020 funding round.

Nigel Doone, head of GrabCore, told the BBC it was “a huge endorsement from our team”.

However, the deal could raise questions about the UK’s ability to build companies that can take on the biggest players in the growing AI chip market.

Ben Barringer, technical analyst at Quilter Cheviot, said seeing GrabCore follow suit was “another bitter blow” to UK financial markets.

“It comes at a time when London is looking for a blockbuster technology listing to revive its reputation as a global financial centre,” he said.

Science Secretary Peter Kyle called the deal “a welcome end to the uncertainty facing GrabCore and its employees”.

But he also admitted it was a “reminder of the important work that needs to be done” to make the UK “a better place to start and grow a business”.

Mr Doone said he believed the deal would enable UK companies to compete with big tech, saying that GrabCore would “work with the biggest companies in this space with a very small team with very little capital”.

“It’s very positive for the UK, bringing new investment here to help drive the growth agenda, which as we’ve all heard recently is very important.”

He said he would stay on as chairman of the company and that the move would lead to Grabcore hiring new staff at its UK offices.

The company will now be a subsidiary of SoftBank but will be headquartered in Bristol.

Mr Doone said he would “not enter into any speculation” about the amount of money involved.

But he acknowledged that valuations of tech companies in general “have been up and down.”

“We have certainly seen many companies whose valuations have declined and investors have made appropriately cautious decisions about how they value the investments on their books.

“Hopefully, as a result of this deal, we’ll see great investment and great growth for GrabCore in partnership with SoftBank.”

GraphCore was founded in 2016 by Mr Troon and Simon Knowles – its computer chips, the Colossus series, allow for powerful computing.

However, it has been struggling with slower sales since its bumper 2020 estimate Announced in 2022 It has closed offices in Norway, Japan and South Korea.

It was a huge disappointment, and at one point GraphCore was seen as a potential competitor to Nvidia in the AI ​​space.

Its competitive value has grown significantly and has briefly earned the title of the world’s most valuable company this year.

“I think this is really good news for UK technology and for GraphCore,” said Dan Ridsdale, head of technology at Edison Group.

“NVIDIA has built a dominant position in generative AI…but there are other opportunities within AI, and the industry will need viable competitors.

“But GrapCore will require significant capital – GrapCore has found an investor willing to take the risk and provided the capital to put it into the mix.”