SoftBank Group Corp. SFTBF SFTBY led by has announced the acquisition of Graphcore, a UK-based chipmaker, in a significant move to bolster its artificial intelligence capabilities.
What Happened: SoftBank, led by Masayoshi Son, has acquired Graphcore, a startup focused on AI, founded by UK semiconductor industry veterans in 2016. The acquisition is part of SoftBank’s multibillion-dollar AI push and will position Graphcore alongside chip designer Arm Holdings PLC ARM in SoftBank’s portfolio, the Financial Times reported on Friday.
“With the advent and the acceleration of AI, what's going to be critical is the foundation layers — not just the models but all the infrastructure around it, including on the semiconductor and systems side,” said Vikas Parekh, a San Francisco-based SoftBank executive who led the investment.
Despite its technology, Graphcore has struggled to commercialize, generating only $2.7 million in sales and $205 million in pre-tax losses in 2022. The company warned last October that it needed to raise new capital within months.
Neither SoftBank nor Graphcore confirmed the deal’s value, but the report, which cited sources familiar with the matter disclosed it to be slightly above $600 million, less than the approximately $700 million the company had raised in venture capital.
SoftBank and Graphcore did not immediately respond to Benzinga’s request for comment.
Why It Matters: This acquisition comes on the heels of SoftBank’s strategic moves in the AI sector. In June, SoftBank announced a joint venture with Tempus AI Inc. to revolutionize healthcare in Japan using AI, investing JPY 15 billion each.
Additionally, SoftBank’s stock hit a 24-year high in July, driven by strategic moves in AI and a strong performance by its chip-design subsidiary, Arm Holdings Plc. This acquisition further cements SoftBank’s position in the AI sector, following its investment in Jeff Bezos-backed AI startup Perplexity AI in June.
Despite its recent successes, SoftBank also faced a significant loss of opportunity in the AI sector when it sold all of its NVIDIA Corp NVDA shares in 2019, missing out on an opportunity of more than $150 billion.
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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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