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Home / Business / Graphcore raises $222 million to acquire Nvidia using AI chips

Graphcore raises $222 million to acquire Nvidia using AI chips



Graphcore founders Simon Knowles and Nigel Toon

Picture core

The UK-based chip maker Graphcore announced on Tuesday that it has raised $222 million in investment to attract US rivals Nvidia and Intel.

Graphcore said it will use the funds to support its global expansion and accelerate the development of its intelligent processing unit (IPU) that specifically powers artificial intelligence software. The company has shipped tens of thousands of chips to customers including Microsoft and Dell.

The E-series financing round was less than a year after Graphcore expanded its last round of financing by US$1

50 million, bringing the company’s valuation to US$2.77 billion, higher than the US$1.5 billion in 2018.

Graphcore CEO and co-founder Nigel Toon told CNBC in July: “Right now, we are not really looking for venture investors in this industry. We are more interested in companies that will become long-term investors and holders. If it reaches this point, it may be the number of shares on the open market.”

At the time, Toon said that a public listing is “ideally what we want to do”, but he emphasized that “before this point, there is still a lot of water to flow under the bridge.”

Now, the total investment in Graphcore is US$710 million, and the four-year-old company has US$440 million in cash.

The latest round of financing was led by the Ontario Teachers’ Pension Plan Committee. Other new investors include private equity investor Baillie Gifford, venture capital investor Draper Esprit, and funds managed by Fidelity International and Schroder.

Toon said in a statement on Tuesday: “The support of such respected institutional investors is very strong for the market’s current view of Graphcore. Their confidence in us comes from our ability to demonstrate the ability to manufacture products and businesses. .”

He added: “We have created a technology whose performance is much better than traditional processors, such as GPUs, a powerful software tool set tailored for AI developers, and global sales to bring our products to market. business.”

Serial chip entrepreneur

Graphcore was founded in Bristol, England in June 2016 by Toon and Simon Knowles, who sold the former chip company Icera to Nvidia in 2011 for $435 million. The two formed Graphcore’s original idea in a small bar called Marlborough Tavern. In Bath in January 2012.

Today, the company employs approximately 450 employees in Bristol, Cambridge, London, Beijing, Oslo, Palo Alto, Seattle and Hsinchu in Taiwan. It is expected that this number will increase to 600 by the end of 2021.

But rapid growth is not cheap. According to the annual report submitted by Companies House, a British business registration company, the company’s revenue in 2019 was US$10.1 million and its pre-tax loss was US$95.9 million.

With its expertise in chip manufacturing, Santa Clara’s heavyweights Intel and Nvidia are two clear leaders in the AI ​​chip market. The two companies have not disclosed how many AI-optimized chips have been sold. However, according to the market data website Statistica, it is estimated that more than one trillion computer chips will be shipped by 2020. In 2019, Intel’s share of the entire chip market was 15.7%. It has been the market leader every year since 2008, except for 2017, where Samsung ranked first.

Graphcore’s Toon criticized Nvidia’s plan to acquire British chip designer Arm from SoftBank for $40 billion, saying it was not conducive to competition.

He said: “We believe that Nvidia’s proposed Arm acquisition is anti-competitive.” “This may face the risk of shutting down or restricting other companies’ access to leading CPU processor designs, which are in the entire technological world. (From data centers, mobile devices, cars to various embedded devices) are all critical.”

Google, Amazon and Apple are also developing their own artificial intelligence chips.

Sequoia Capital supports Nvidia and Graphcore

Graphcore’s previous investors include companies such as Microsoft and BMW iVentures, as well as venture capital firms such as London’s Atomico and Silicon Valley’s Sequoia, the latter also supporting Nvidia.

Last month, Matt Miller, a partner at Sequoia Capital, told CNBC: “Graphcore is in such a position that they always have people come to them and try to give them more money. Therefore, they don’t need capital. . In the next few years, their funds are good, but they definitely have people who are trying to invest in the company.”

He added: “I don’t think you have to compete with Nvidia because the market is so big. Competing with Nvidia is like a daunting task. This is a huge company with billions of dollars in revenue. The awesome team is doing all kinds of wonderful things. I think what Graphcore has the opportunity to do is to play a very important role in the AI ​​microprocessor market. It continues to make great progress in many cloud providers, and many people hope to achieve diversity They don’t want to use one chip for all.”

Despite the interference from the coronavirus pandemic, Graphcore launched its second-generation IPU earlier this year.


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