Graphcore founders Simon Knowles and Nigel Toon
Graphcore
LONDON – Graphcore, a UK chip maker, announced on Tuesday that it has raised $ 222 million in investment, as it seems to take on American rivals Nvidia and Intel.
Graphcore said it will use the funding to support its global expansion and accelerate the development of its information processing units (IPUs), which are specifically designed to power artificial intelligence software. The company has already delivered tens of thousands of chips to customers, including Microsoft and Dell.
The E-Series financing round, which comes less than a year after Graphcore raised $ 150 million in its latest round, puts the company at $ 2.77 billion, up from $ 1.5 billion. billion dollars in 2018.
Graphcore CEO and co-founder Nigel Toon told CNBC in July: “We are now at the point where we are not really looking for venture capitalists. We are more interested in companies that would be long-term investors and shareholders. probably in public markets, if we ever get to that point. “
At the time, Toon said the public publication was “ideally what we would like to do,” but stressed that “there is still a lot of water to flow under the bridge before it gets to that point.”
The total investment in Graphcore now amounts to 710 million dollars, and the four-year-old company has 440 million dollars in cash.
The most recent round of funding was led by the Ontario Teachers’ Pension Plan Board, while other new investors included private equity investor Baillie Gifford, venture capitalist Draper Esprit, and funds managed by Fidelity International. and Schroders.
On Tuesday, Toon said in a statement: “With the support of respected institutional investors, it says something very powerful about how markets now see Graphcore. The trust they have in us comes from the competence we have demonstrated to build our products and business. “
He added: “We have created a technology that dramatically outperforms old processors, such as GPUs, a powerful set of software tools tailored to the needs of AI developers, and a global sales operation that brings our products to market.”
Serial entrepreneurs
Graphcore was founded in June 2016 in Bristol, England, by Toon and Simon Knowles, who sold their former chip company, Icera, to Nvidia for $ 435 million in 2011. The pair formed the original idea for Graphcore in a small pub called Marlborough Tavern. in Bath in January 2012.
Today, the company has approximately 450 employees in Bristol, Cambridge, London, Beijing, Oslo, Palo Alto, Seattle and Hsinchu in Taiwan. The number is expected to increase to 600 by the end of 2021.
But rapid growth has not been cheap. It recorded a pre-tax loss of $ 95.9 million on revenue of $ 10.1 million in 2019, according to an annual report filed with the UK Companies House business register.
The heavyweight Santa Clara Intel and Nvidia are two of the first highlights in the AI chips market, given their expertise in chip manufacturing. The companies did not disclose how many of their AI-optimized chips were sold. However, more than a trillion computer chips are expected to be delivered in 2020, according to the market data site Statistics. In 2019, Intel’s global chip market segment reached 15.7% and has been the market leader every year since 2008, except for 2017, when Samsung took first place.
Graphcore’s Toon has criticized Nvidia’s plan to buy British designer Arm from SoftBank for $ 40 billion, saying it is bad for competition.
“We believe that Nvidia’s proposed acquisition of Arm is anti-competitive,” he said. “It risks shutting down or limiting the access of other companies to the latest designs of CPUs that are so important in the world of technology, from data centers, to mobile, to machines and embedded devices of any kind. “
Google, Amazon and Apple are also working on their own AI chips.
Sequoia supports Nvidia and Graphcore
Previous investors in Graphcore include Microsoft and BMW iVentures, as well as venture companies such as London’s Atomico and Silicon Valley’s Sequoia, which also supported Nvidia.
Last month, Sequoia partner Matt Miller told CNBC: Graphcore “is in this position where they always have people coming to them trying to give them more money. So they don’t need funding. They’re well funded in the next few years, but they certainly have people trying to invest in the company. “
He added: “I don’t think you have to take on Nvidia because the market is so huge. Taking Nvidia is like this huge task. It’s a huge company with billions of revenue and incredible teams doing all sorts of wonderful things. I think what Graphcore has the ability to do is be a very strong player in the AI microprocessor market. It continues to make great strides with many of the cloud providers and many people want to be diversified. cip “.
Graphcore launched the second generation IPU earlier this year, despite the outage due to the coronavirus pandemic.