Specialist UK semiconductor maker Graphcore, which has its roots in Bath, is poised to take on the global giants of the industry after being acquired by Japanese investment group SoftBank.
The idea for Graphcore was born in 2012 when co-founder Nigel Toon and Simon Knowles met in Bath's Marlborough Tavern to discuss their next venture after selling their previous semiconductor businesses.
Mr Toon had been at the helm of Bath-based microchip design firm Picochip, which he had sold earlier that year to US company Mindspeed Technologies for £33.6m. 
He and Mr Knowles had previous worked together at pioneering Bristol-based semiconductor company Icera, which they had sold in 2011.
Graphcore was eventually launched in Bristol in 2016 after three years in ‘stealth’ mode and became the city’s first tech ‘unicorn’ two years later as sales of its innovative chips -widely acknowledged as among the most powerful on the market – soared.
The takeover by SoftBank, which bought UK chip designer Arm in 2016 for £24bn, will provide Graphcore with the investment needed to “redefine the landscape for AI technology”, according to the firm’s co-founder and CEO Nigel Toon, pictured.
He said its head office would remain in Bristol and become a launchpad for it to meet the spiralling worldwide demand for AI computer chips. 
Despite Graphcore receiving funding of more than $450m since its launch through a string of successful investment rounds and achieving unicorn status – meaning it was worth more than £1bn - market analysts say it has failed to live up to its early promise.
At one time the firm, which also has offices in Cambridge, London, Gdansk and Hsinchu, was viewed as a possible UK competitor to US chip giants Nvidia and Intel.
But having been valued at $2.77bn (£2.13bn) at the end of 2020, reports last year said it needed more cash to break even, despite slashing staffing by around 20% to less than 500 employees and closing its bases in Norway, Japan and South Korea.
SoftBank and Graphcore both declined to put a price on the takeover, although some reports have suggested it could be in the region of $500m.
Mr Toon described the deal as a tremendous endorsement of the Graphcore team and their ability to build “truly transformative AI technologies at scale”, adding it was a “great outcome for our company”.
“Demand for AI compute is vast and continues to grow,” he 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.
“This is a level of investment that is utterly massive. Graphcore, as a modestly sized company compared to those we're competing with, has actually managed to go toe-to-toe and build world-class technology.”
Graphcore will continue to trade under its own name as part of SoftBank.
