Japanese multinational investment company SoftBank Group has been considering the acquisition of Graphcore, a UK semiconductor startup that has faced challenges despite a previous valuation of $2.8bn, according to a report by Bloomberg.
Bloomberg’s unnamed sources revealed that SoftBank’s discussions have been ongoing for several months and have recently progressed to more detailed negotiations, although the financial terms are yet to be finalised. The possibility of the talks falling through still exists, and a final agreement is not expected in the immediate future.
According to the report, the discussions come as Masayoshi Son, Chairman of SoftBank, reportedly plans to amass approximately $100bn to fund an AI chip venture, having paused its tech investments in 2022 and returning to dealmaking in late 2023 with a focus on AI and autonomy.
The discussions also coincide with a period of increased sales for SoftBank, largely attributed to its majority ownership of another UK-based chip designer, Arm Holdings. In February, Arm announced developments in its expansion beyond smartphones into additional artificial intelligence applications, leading to a roughly 40% increase in its share price.
Graphcore was founded in Bristol in 2016 and specialises in a different type of chip technology than Arm, designing large “intelligence processing units” intended to assist with AI software processing within data centres.
Despite securing investment from companies such as Samsung Electronics, Bosch and Sequoia Capital, Graphcore has struggled to gain momentum. The company’s revenue for 2022 was reported at just $2.7 m, a 46% decrease from the previous year, and pre-tax losses increased to $204.6m. Graphcore has closed operations in Norway, Japan and Korea and plans to reduce its workforce in other markets. The company has also indicated a need to secure additional capital to continue operations.
