Title: Chipmaking Startup Graphcore Faces Financial Struggle Amidst Lower Revenues
Subtitle: OpenAI Could Be a Potential Savior for Graphcore, Shaking Up the AI Chip Market
Graphcore, a chipmaking startup that previously had Microsoft as a customer, is at risk of financial difficulties unless it secures millions of dollars in financing in the coming months, as stated in its latest accounts.
Despite the high demand for chips in the AI industry, Graphcore has been unable to capitalize on this opportunity. Once considered a key rival to industry giants Nvidia and AMD, the UK-based unicorn achieved a valuation of $2.5 billion in 2020 after a successful funding round. However, due to lower sales from important strategic customers, the company’s revenues have declined.
Notably, a deal with Microsoft fell through, leading to Graphcore losing a significant potential partnership when Microsoft decided not to continue using Graphcore’s chips in its cloud computing systems.
According to the Financial Times (FT), Graphcore has less than a year to raise capital in order to maintain a healthy business. The company is currently in discussions with potential investors for another funding round.
In light of the AI industry’s rapid growth, OpenAI, a prominent player in the field, is rumored to be considering developing its own AI chips instead of relying on Nvidia’s A100 GPUs. OpenAI has even identified potential acquisition targets, as reported by Reuters, although no concrete actions have been taken yet. The scarcity of chips in the market, with only a few companies mass-producing components for AI workloads, is a major factor in OpenAI’s exploration of chip development.
OpenAI, with its massive valuation of $100 million, has also explored the possibility of building its own chips. While collaborating closely with Nvidia, the leading chipmaker, OpenAI aims to diversify its supply beyond a single provider. Nvidia currently holds an 80% market share, but competitors are emerging, and innovative solutions are under development.
If OpenAI decides to invest in a chipmaking firm to secure its chip supply or disrupt the market, Graphcore presents a potential opportunity. Although there is no guarantee, an early investment in Graphcore could serve as a stepping stone towards a larger partnership in the future.
As the deadline approaches for Graphcore to raise necessary funds, its fate hangs in the balance, and the potential involvement of OpenAI adds an intriguing twist to the evolving AI chip market.
