‘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.”

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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.