SoftBank bought chipmaker Graphcore to strengthen its position in AI

The Japanese holding company SoftBank has acquired the British company Graphcore, which specializes in the production of chips, including solutions for artificial intelligence. The deal is part of SoftBank’s multibillion-dollar strategy to strengthen its position in AI.

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Founded in 2016 by British semiconductor industry veterans, Graphcore will join SoftBank’s portfolio, which already includes chip designer Arm. The acquisition reflects Masayoshi Son, SoftBank’s founder, intends to make “the next big bet” in the technology industry, the Financial Times reports.

The amount of the deal was not disclosed, but according to sources familiar with the situation, it amounted to just over $600 million. It’s worth noting that Graphcore was valued at approximately $2.5 billion in 2020. However, the company had difficulty commercializing its technology in 2022 and reported sales of just $2.7 million and a pre-tax loss of $205 million.

SoftBank’s support in this case is a real chance to expand production and reach a new level, since SoftBank plans to provide significant resources to Graphcore. Nigel Toon, CEO and co-founder of Graphcore, who remained in his post after the deal, said the company’s main problem was a lack of scalability and capital. He hopes that Graphcore will now be able to compete with tech giants such as Nvidia and AMD. The transaction was completed after receiving all necessary regulatory approvals in the UK and US, as well as national security approval from the British government.

Significantly, ahead of the deal, Graphcore decided to exit its Chinese business after U.S. export controls on AI chips made dealing with the Middle Kingdom, according to Tung, extremely difficult. Now Graphcore and SoftBank will focus on customers in America and Europe.

It is noted that this deal is the next step in the implementation of Masayoshi Son’s ambitious plans to create the era of artificial intelligence. SoftBank also recently invested more than $1 billion in UK self-driving car startup Wayve.