SoftBank, the Japanese multinational conglomerate, has officially acquired Graphcore, a prominent U.K.-based chip company specializing in AI hardware. While rumors of the acquisition have circulated for some time, both parties refrained from confirming details until now, citing ongoing negotiations and regulatory approvals.

Graphcore, founded in 2016 and based in Bristol, has gained recognition for its innovative “intelligence processing unit” (IPU), designed specifically for AI workloads. Distinct from traditional graphics processing units (GPUs), IPUs are optimized for large-scale parallel processing and complex machine learning tasks, emphasizing tight integration of models and data.

Despite earlier reports suggesting a $500 million valuation, Graphcore CEO Nigel Toon dismissed these figures as inaccurate during a recent press briefing. The company, which had previously raised approximately $700 million and reached a valuation close to $3 billion, faced challenges in scaling its operations despite significant investments from major players like Microsoft and Sequoia, as well as notable individuals including Demis Hassabis and Greg Brockman.

Graphcore’s journey has been marked by setbacks, including regulatory hurdles leading to its exit from China due to U.S. export regulations. The company also missed out on major cloud computing deals, contributing to financial pressures and the necessity for strategic decisions such as acquisition.

SoftBank’s acquisition of Graphcore follows its notable acquisition and subsequent spin-out of Arm, a leading semiconductor company, highlighting SoftBank’s strategic interest in bolstering its AI capabilities across data centers, robotics, and AI-driven semiconductors. Despite external perspectives viewing the acquisition as potentially limiting Graphcore’s independent growth in the European AI hardware sector, CEO Toon expressed optimism about the acquisition’s potential positive impact, affirming that there are no anticipated layoffs and hinting at potential growth in workforce across Graphcore’s global hubs.

Both Nigel Toon and CTO co-founder Simon Knowles will retain their executive and directorship roles within Graphcore, underscoring continuity in leadership amidst the acquisition.

The acquisition of Graphcore by SoftBank represents a significant move in the global AI hardware landscape, positioning SoftBank to further advance its ambitions in AI technologies crucial for future industry innovations.