Graphcore, a British AI chip designer once considered a potential rival to Nvidia, is now exploring a sale after struggling to capitalize on the AI boom.
Despite substantial funding, including more than $700 million from investors like Microsoft and Sequoia, the company’s revenues fell 46% last year and losses have widened since then. The company has not been able to compete with Nvidia’s graphics processing units, which have seen a surge in demand during the AI revolution.
Rumored potential buyers for Graphcore include British microchip company Arm, Japanese tech conglomerate Softbank (which has a majority stake in Arm) and AI darling OpenAI. However, it remains unclear how far along these sales talks are.
No more cash
Graphcore, meanwhile, continues to make independent fundraising calls, seeking new funding to cover mounting losses. The company has already laid off staff and closed international offices in an effort to cut costs.
Yahoo! Finances says the company’s current financial situation indicates it will need to raise more money by May to stay afloat. This comes after a failed deal with Microsoft, where the tech giant reportedly initially agreed to use Graphcore’s chips in its cloud computing systems but later pulled out.
While Graphcore’s future remains uncertain, the company’s intelligence processing units could be a valuable asset in the fast-growing AI market. However, any sale, which could exceed $500 million, will likely be scrutinized by national security officials due to the strategic importance of AI technology.