British AI champion explores foreign sale

THE British microchip champion Graphcore is exploring a sale to foreign owners after struggling to cash in on the artificial intelligence (AI) boom.

Industry sources said Graphcore has been discussing a potential deal with major tech companies as it seeks to raise funding to cover heavy losses.

Senior investors in the Bristol-based company have also significantly marked up the value of their stakes in a potential indication of a deal that could be worth more than $500m (£400m). Graphcore, which has sought to challenge giants such as Nvidia with microchips specialising in AI software, said last year that it needed to secure new funding after revenues fell by 46pc and losses widened.

The company was in talks with investors about raising money but is believed to have had difficulty raising fresh cash.

Rumoured buyers have included the British microchip company Arm, the Japanese tech conglomerate SoftBank, and OpenAI, the AI start-up behind ChatGPT. The companies declined to comment. It is unclear how advanced any sale discussions are.

Chrysalis, the London-listed investment fund that has a stake in Graphcore, said in December that an unnamed company in its portfolio was in the process of being sold. Weeks later it more than doubled the valuation of its Graphcore stake. One investor has calculated that this put a $528m valuation on Graphcore.

The investment manager Baillie Gifford also recently more than doubled the valuation of its stake in Graphcore.

Graphcore, Baillie Gifford and Chrysalis declined to comment.