SoftBank Acquires AI Chip Designer Graphcore in Strategic Move Towards AGI

Softbank takes over AI processor designer Graphcore

SoftBank Group has acquired Graphcore, an AI processor designer from the U.K., for an undisclosed amount. Graphcore, which has been looking for a buyer for a while, has developed a unique architecture for AI processors but has failed to become competitive against Nvidia and other makers of off-the-shelf AI processors. The acquisition could be a part of Softbank's push into the AI processor venture, Project Izanagi, or something unrelated. Under the terms of the deal with Softbank, Graphcore becomes a wholly owned subsidiary of SoftBank. It will keep its brand and continue to operate under the Graphcore name, which suggests it will also hold its architecture. However, Nigel Toon, chief executive and founder of Graphcore, mentioned potential collaboration with Arm Holdings, another Softbank-owned chip designer, and 'other' companies in its parent's portfolio so that we can see the architecture. Unlike most AI processors on the market, Graphcore's intelligence processing units (IPUs) do not use expensive HBM or GDDR/LPDDR memory but rely entirely on internal SRAM, making its architecture completely different. Graphcore's very first IPU -- the Colossus MK2 GC200, which was the most complex ASIC at the time -- packed 1,472 independent IPU cores with simultaneous multithreading (SMT) capable of managing 8,832 parallel threads and featured 10 IPU links for scaling out with other GC200 chips. It also boasted 900 MB of SRAM, offering an aggregated bandwidth of 47.5 TB/s per chip, eliminating the need for external memory. Despite early promises and performance comparable to Nvidia's A100 (250 FP16 TFLOPS vs. A100's 312 FP16 TFLOPS without sparsity), Graphcore has failed to become a viable competitor for the green company. Toon blamed a lack of sufficient investments for its modest success in the market. Meanwhile, the company has raised some $700 million since its founding, which was once valued at $2.77 billion in late 2020. Softbank reportedly paid $400 million for the company, according to EE Times. The big question now is whether Graphcore will act independently and continue to design IPUs or become part of Project Izanagi, which aims to develop Softbank's own AI processors and then compete against AMD, Intel, and Nvidia. It is noteworthy that Arm is reportedly designing AI processors for its parent company, which plans to use them in its own data centers. Hence, the fate of Graphcore's architecture is unclear at best. Potentially, with funding from Softbank, Graphcore's architecture will be able to compete better against market leaders. Yet, it will take some time for the company to scale up its operations, as it is barely possible to compete successfully against Nvidia, which has about half a thousand employees. Last year's filing indicated the company needed additional funds to break even. In response to financial pressures, Graphcore reduced its workforce by 20%, bringing its headcount down to 494 employees, and closed operations in Norway, Japan, and South Korea. Under the deal with Softbank, Graphcore will maintain its headquarters in Bristol and offices in Cambridge, London, Gdansk, and Hsinchu. Yet, it will likely be unable to sell its processors to Chinese entities anyway. "This is a tremendous endorsement of our team and their ability to build truly transformative AI technologies at scale, as well as a great outcome for our company," said Nigel Toon. "Demand for AI compute is vast and continues to grow. There remains much to do to improve efficiency, resilience, and computational power to unlock the full potential of AI. In SoftBank, we have a partner that can enable the Graphcore team to redefine the landscape for AI technology."

Troubled AI Processor Developer Graphcore Finds a Buyer: SoftBank

After months of searching for a buyer, troubled U.K.-based AI processor designer Graphcore said on Friday that it has been acquired by SoftBank. The company will operate as a wholly owned subsidiary of SoftBank and will possibly collaborate with Arm, but what remains to be seen what happens to the unique architecture of Graphcore's intelligence processing units (IPUs). Graphcore will retain its name as it will become a wholly owned subsidiary of SoftBank, which paid either $400 million (according to EE Times) or $500 million (according to BBC) for the company. Over its lifetime, Graphcore has received a total of $700 million of investments from Microsoft and Sequoia Capital, and at its peak in late 2020, was valued at $2.8 billion. Nigel Toon will remain at the helm of Graphcore, which will hire new staff in its UK offices and continue to be headquartered in Bristol, with additional offices in Cambridge, London, Gdansk (Poland), and Hsinchu (China). "This is a tremendous endorsement of our team and their ability to build truly transformative AI technologies at scale, as well as a great outcome for our company," said Nigel Toon. "Demand for AI compute is vast and continues to grow. There remains much to do to improve efficiency, resilience, and computational power to unlock the full potential of AI. In SoftBank, we have a partner that can enable the Graphcore team to redefine the landscape for AI technology." Although Graphcore says that it had won contracts with major high-tech companies and deployed its IPUs, it could not compete against NVIDIA and other prêt-à-porter AI processor vendors due to insufficient funding. In the recent years the company's problems were so severe that it had to lay off 20% of its staff, bringing its headcount to around 500. Those cuts also saw office closures in Norway, Japan, and South Korea, which made it even harder to compete against big players. Graphcore certainly hopes that with SoftBank's deep pockets and willingness to invest in AI technologies in general and AI processors in particular, it will finally be able to compete head-to-head with established players like NVIDIA. When asked whether Graphcore will work with SoftBank's Arm, Nigel Toon said that he was looking forward to work with all companies controlled by its parent, including Arm. Meanwhile, SoftBank itself is reportedly looking forward to build its own AI processor venture called Project Izanagi to compete against NVIDIA, whereas Arm is reportedly developing AI processors that will work in datacenters owned by SoftBank. Therefore, it remains to be seen where does Graphcore fit in. For now, the best processor that Graphcore has is its Colossus MK2 IPU, which is built using 59.4 billion transistors and packs in 1,472 independent cores with simultaneous multithreading (SMT) capable of handling 8,832 parallel threads. Instead of using HBM or other types of external memory, the chip integrates 900 MB of SRAM, providing an aggregated bandwidth of 47.5 TB/s per chip. Additionally, it features 10 IPU links to scale with other MK2 processors. When it comes to performance, the MK2 C600 delivers 560 TFLOPS FP8, 280 TFLOPS FP16, and 70 TFLOPS of FP32 performance at 185W. To put the numbers into context, NVIDIA's A100 delivers 312 FP16 TFLOPS without sparsity as well as 19.5 FP32 TFLOPS, whereas NVIDIA's H100 card offers 3,341 FP8 TFLOPS.

SoftBank Acquires Chip Designer Graphcore On 'Journey' To Artificial General Intelligence

'In SoftBank, we have a partner that can enable the Graphcore team to redefine the landscape for AI technology,' Graphcore co-founder and CEO Nigel Toon says of the acquisition. Japanese investment giant SoftBank Group has acquired AI chip designer Graphcore as part of what it called its "journey" to artificial general intelligence, or AGI for short. Graphcore unveiled the deal Thursday, saying that the Bristol, U.K.-based company will become a wholly owned subsidiary of SoftBank, keep its name and continue creating "high-skilled jobs spanning a range of disciplines." [Related: AMD To Acquire AI Lab, LLM Developer Silo AI For $665 Million] The financial terms of the deal were not disclosed. The deal was announced a little more than two months after a Bloomberg report stated that SoftBank was in advanced talks to buy Graphcore. Founded in 2016, Graphcore had struggled in recent years to find traction for its intelligence processing unit (IPU) chip, a novel chip architecture it has previously said is better suited for AI applications than Nvidia's data center GPUs due to the IPU's "fine-grained parallelism." The company had attracted hundreds of millions of dollars in funding from big-name investors like Sequoia Capital, Microsoft, Dell Technologies and Samsung over several years, which allowed it to reach a $2.8 billion valuation in 2020. But a couple years after pushing new generations of IPUs that it said were competitive against Nvidia's A100 GPU, the company said its business suffered from deteriorating macroeconomic conditions that slowed down sales of systems outfitted with its IPUs. As a result, Graphcore's 2022 revenue declined 46 percent to $2.7 million and it slashed head count by 21.7 percent to 494 employees that year, according to public filings with the U.K. government. Around that time, Graphcore started to diversify its business model, which mainly revolved around selling IPU systems, by making a push to sell access to such systems in the cloud through partners like Gcore in Europe and Paperspace in North America. The company also terminated a partner program it had launched in 2020 that included solution providers in North America, though a spokesperson told CRN earlier this year that Graphcore continues to work with channel partners. As Graphcore struggled, Nvidia grew its dominance of the AI computing space with its data center GPUs and became one of the world's most valuable companies earlier this year. Now with SoftBank acquiring Graphcore, the company has a renewed sense of purpose, a fresh jolt of energy and a new source of investment that it said will enable new development. "This is a tremendous endorsement of our team and their ability to build truly transformative AI technologies at scale, as well as a great outcome for our company," said Graphcore co-founder and CEO Nigel Toon in a statement. Calling demand for AI computing solutions "vast" with plenty of room for growth, Toon said, "there remains much to do to improve efficiency, resilience and computational power to unlock the full potential of AI." "In SoftBank, we have a partner that can enable the Graphcore team to redefine the landscape for AI technology," the semiconductor veteran said. SoftBank acquired Graphcore as it seeks to raise $100 billion for an AI chip venture that competes with Nvidia, Bloomberg previously reported. The firm formerly owned British chip designer Arm until September of last year, when it took the company public while retaining a majority of Arm's shares. Since then, Arm's stock price has risen by 185 percent. "Next-generation semiconductors and compute systems are essential in the AGI journey, we're pleased to collaborate with Graphcore in this mission," said Vikas J. Parekh, managing partner at SoftBank Investment Advisers, in a statement.