Tiny AI chip designer could become Arm’s sibling - Softbank rumored to be interested in buying cash-strapped Graphcore with its IPU crown jewel likely to be the target

Graphcore needs to raise significant funds by May to survive

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Graphcore, a UK-based AI chip designer that was once considered a potential rival toNvidia, is now exploring a sale after struggling to capitalize on the AI boom.

Despite substantial funding, including over $700m from investors such asMicrosoftand Sequoia, the company’s revenue fell by 46% last year, and losses have since widened. The company has been unable to compete with Nvidia’s graphics processing units, which have seen soaring demand during the AI revolution.

Rumored potential buyers for Graphcore include British microchip companyArm, Japanese tech conglomerate Softbank (which has a majority share in Arm), and AI darlingOpenAI. However, it remains unclear how advanced these sale discussions are.

Running out of cash

Graphcore meanwhile continues to engage in independent fundraising talks, seeking new funding to cover its mounting losses. The company has already laid off staff and closed international offices in a bid to slash costs.

Yahoo! Financesays the company’s current financial situation indicates that it needs to raise more funds by May to stay afloat. This comes after a failed deal with Microsoft, in which the tech behemoth reportedly initially agreed to use Graphcore’s chips in its cloud computing systems but later backed out.

While the future of Graphcore remains uncertain, the company’s intelligence processing units could be a valuable asset in the rapidly expanding AI market. However, any sale, which could be north of $500m, is likely to be scrutinized by national security officials due to the strategic importance of AI technology.

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Wayne Williams is a freelancer writing news for TechRadar Pro. He has been writing about computers, technology, and the web for 30 years. In that time he wrote for most of the UK’s PC magazines, and launched, edited and published a number of them too.

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