Bristol start-up raises $200m from Microsoft and BMW to gain edge in AI chip arms race

James Cook
Graphcore chief executive Nigel Toon said his company plans to hire more staff in the UK - Piranha Photography
Graphcore chief executive Nigel Toon said his company plans to hire more staff in the UK - Piranha Photography

Bristol-based Graphcore, which designs chips purpose-built for artificial intelligence, has raised $200m (£158m) in funding from investors including Microsoft and BMW.

The latest funding round values the business at $1.7bn, making it the latest UK-based “unicorn” of the year, alongside digital bank Monzo and cyber security group Darktrace.

The company is attempting to create new class of chips that are better able to deal with the huge amounts of data needed to make AI computers.

It believes existing processors, made by the likes of Intel and Nvidia, have limitations that are slowing that the roll out of AI. 

Graphcore recently shipped the first units of its “Colossus” processing units to customers. 

The company says that its chips are the first in the world to be designed to run machine learning programmes, a type of artificial intelligence which allows computers to automatically learn and teach themselves.

The new funding round was led by British venture capital firm Atomico and Belgian investor Sofina. Existing investors Dell, Samsung, Sequoia Capital, Amadeus Capital and Draper Esprit also participated.

Chief executive Nigel Toon wrote that the business plans to hire more employees in its Bristol headquarters, as well as in offices in London, the US, Norway, China and Taiwan.

Graphcore previously raised a $30m funding round last year, which included participation from Demis Hassabis, the chief executive of Google’s DeepMind artificial intelligence business.

Google is also developing its own purpose-built chips for artificial intelligence.

The tensor processing unit have not been sold, however, as Google intends to use the chips inside its data centres. Other competitors attempting to build similar chips include Qualcomm, Huawei and Nvidia.

“Machine intelligence marks the start of a new age of computing which needs a radically different type of processor and software tools,” Mr Toon wrote.

“This new, fast growing market creates the opportunity for Graphcore to build a major global technology company that can help innovators in AI achieve important breakthroughs.”