The semiconductor world is changing. From shrinking chips to components built with specific technologies in mind, things aren’t as they once were. One of the industry’s hottest trends is building components for artificial intelligence (AI) applications.
This is something that the U.K.-based chipmaker Graphcore specializes in. Now, the company has raised $222 million as part of a Series E funding round, TechCrunch reports. The cash injection helps Graphcore balance its finances before possibly seeking an IPO in the near future. While the chipmaker hasn’t officially started the process, its new funding gives it the flexibility to go public should it choose to.
Graphcore’s CEO and co-founder, Nigel Toon, confirmed the funding round in a recent interview. While it is a noteworthy sum, the fresh $222 million is only a fraction of the company’s total worth. It will enter 2021 with a $2.77 billion valuation.
Toon says, “We’re in a strong position to double down and grow fast and take advantage of the opportunity in front of us.”
Although Toon avoided calling the Series E a “pre-IPO” round, the executive noted that the additional funding puts Graphcore in a good position moving forward. Recent rumors noted by The Telegraph suggest that the chipmaker is seeking a spot on the Nasdaq.
Of course, the large cash injection isn’t only a boost to Graphcore’s financial health. The company will also use the funding to expand its proprietary chip architecture. Dubbed the intelligence processing unit (IPU), Graphcore’s hardware is designed specifically for AI use cases, TechCrunch reports. That puts it in competition with big names in the chip industry—including the likes of Intel and Nvidia.
The round was completed thanks to a number of different investors. Noteworthy names include the Ontario Teachers’ Pension Plan, Fidelity International, and Schroders. To date, Graphcore has raised $710 million.
The possibilities surrounding a technology like AI are endless. Companies and individuals will undoubtedly build amazing things with it in the years to come. Thanks to chips designed specifically for AI, those innovations will become more accessible.
That being said, the path forward isn’t all roses for Graphcore. The company faces a significant challenge from industry giants like Nvidia. Understandably, Graphcore isn’t happy about Nvidia’s pending acquisition of Arm. In an interview, Toon said, “If we’re not careful, things will consolidate too much and that could kill off innovation. We have made our position clear to the U.K. government. We [Graphcore] don’t think the Nvidia Arm deal is a good thing.”
Nonetheless, things look positive for the components industry as a whole. As the pandemic begins to subside in 2021, markets will finally have a chance to stabilize and catch up after 2020’s grueling challenges.
Chipmakers focused on the AI space will have even more room to grow. Oliva Steedman, senior managing director of the Teachers’ Innovation Platform for Ontario Teachers, says, “The market for purpose-built AI processors is expected to be significant in the coming years because of computing megatrends like cloud technology and 5G and increased AI adoption, and we believe Graphcore is poised to be a leader in this space.”
Thanks to that confidence, and the many uses of AI in the future, Graphcore’s path forward is bright. It will be interesting to see how this chipmaker and others in the AI space impact the broader industry in 2021 and beyond.