Japanese Conglomerate SoftBank is acquiring UK chip firm Graphcore for $600m. The latter, even with impressive technology, has been facing financial struggles. SoftBank’s acquisition would serve to enhance such tech for Artificial Intelligence and compete with other giants like Nvidia. The acquisition could make AI infrastructure more efficient and competitive.

Japan’s SoftBank owns CPU designer Arm, previously announced that it has acquired UK-based chipmaker Graphcore for an unknown sum.

Graphcore CEO Nigel Toon commented that the deal shows confidence in the team and its ability to build sophisticated AI technologies. It is also, he added, a good outcome for the firm. The acquisition is believed to cost about $600 million. That’s below the $700 million Graphcore had raised from investors. Graphcore designs special chips called “Intelligence Processing Units” that help speed up AI tasks. It also provides software to make it easier for developers to use its hardware.

Graphcore’s tech is impressive. In 2022, its chip outperformed Nvidia’s A100 GPU in a test and cut the time taken for a drug discovery project. But despite such successes, it struggled to make money. In 2022, the company made a mere $2.7 million of revenue against $206.8 million of expenses. That has meant deep job cuts and questions over whether the company has a future.

One of the strategic options for the strengthening of their financial position was the entering of the Chinese market. But the US government did not allow selling their products in China and closed this way. Their opponent, Nvidia continued generating revenue as it became one of the largest suppliers of artificial intelligence technology.

According to CEO Toon, SoftBank can make Graphcore a success. He added, “Demand for AI computing is huge and it’s growing. We need to enhance efficiency and power if we are to unlock full AI potential. SoftBank will help us reshape AI technology.”

Vikas J Parekh from SoftBank also reacted to the event, saying next-generation chips are essential in developing AI, and as such, the team is very excited to start working with Graphcore.

The SoftBank CEO has stated that “artificial superintelligence” may arrive in just three years. Their deal with Graphcore takes into context a bigger plan to rise in the AI chip market. Well, SoftBank already owns major processor design firm Arm, which also plans to compete with Nvidia in the development of AI chips.

The technology from Graphcore has already been proven to be sound. With the financial backing of SoftBank and its relationship with Arm, Graphcore can do better financially. The partnership could also advance the performance of servers based on chips from Arm, since Graphcore chips can work in conjunction with a variety of hardware.

Conclusively, SoftBank is trying to make the AI infrastructure market—through its acquisition of Graphcore—more competitive and innovative. So, this acquisition may lead to new innovations in AI technology and give better options compared to those available currently.