In a significant move within the artificial intelligence (AI) industry, Japan's SoftBank Group has acquired British AI chipmaker Graphcore for an undisclosed sum.

The acquisition, announced on 12 July, ends speculation about the future of the once-promising startup and secures its position in the competitive AI chip market.

Graphcore, founded in Bristol, had been facing financial difficulties despite its initial promise as a potential rival to industry leader Nvidia. The company's valuation, which peaked at $2.77 billion in 2020, had declined as it struggled to secure necessary investments to compete effectively.

Nigel Toon, co-founder and chief executive officer of Graphcore, who will remain in his role, acknowledged the challenges the company faced: "The piece that surprised us was the speed at which this has taken off, and the scale that is involved. This is a level of investment that is utterly massive."

The acquisition by SoftBank is expected to provide Graphcore with the resources needed to compete on a global scale. Toon expressed optimism about the partnership, stating, "In SoftBank, we have a partner that can enable the Graphcore team to redefine the landscape for AI technology."

Peter Kyle, the UK's newly appointed Secretary of State for Science, Innovation and Technology, welcomed the deal, describing it as a "welcome end to the uncertainty that has faced Graphcore and its employees".

The move aligns with SoftBank's strategy of investing in AI and chip technologies. Vikas J Parekh, a managing partner at SoftBank Investment Advisers, emphasised the importance of such investments: "Next-generation semiconductors and compute systems are essential in the AGI journey. We're pleased to collaborate with Graphcore in this mission."

Graphcore will continue to operate under its own name as a wholly owned subsidiary of SoftBank. The company, which currently employs 350 people, will maintain its headquarters in Bristol, with additional offices in Cambridge, London, Gdańsk, and Hsinchu.

While the exact value of the deal remains undisclosed, the Financial Times reported it to be around $600 million, citing sources familiar with the matter.

The acquisition marks another significant investment by SoftBank in the UK tech sector, following its previous acquisition of chip designer Arm in 2016 and recent investment in self-driving technology startup Wayve.

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