AI ‘unicorn’ Graphcore set to cut jobs

Business news | September 27, 2022

By Peter Clarke

Artificial intelligence (AI) chip startup Graphcore Ltd. (Bristol, England) is proposing to axe jobs at multiple sites due to the “macroeconomic” situation.

A spokesperson from Graphcore told eeNews Europe that because a consultation process is underway the company would not at this time discuss how many jobs or what proportion of the workforce are likely to be cut.

The company said in a statement: “Graphcore has significant cash reserves and is well positioned to take advantage of the AI compute opportunity, however the macroeconomic backdrop is extremely challenging. This means making some hard but necessary decisions around our priorities to put us in the best possible position for sustainable growth in 2023. We are proposing reducing our headcount worldwide and have entered consultation in a number of locations.”

The company has developed a series of multi-cored intelligent processing units (IPUs), optimized for AI routines, which it offers as chips, on boards and in racks, along with software and development environments. The company’s headcount at the end of 2021 was 633 employees up from 455 at the start of the year. The company has been expanding rapidly and besides its Bristol headquarters has offices in Cambridge and London, Munich, Oslo, Gdansk, Palo Alto, Seoul, Tokyo, Hsinchu, Beijing, Shanghai and Shenzhen.

Double-unicorn

Graphcore has been Europe’s most successful semiconductor startup in terms of funds raised. In December 2020 the company announced a Series E round of finance that eventually brought in US$243.4 million. This brought the total raised by the company in equity funding to approximately US$730 million since it was founded in 2015. That funding drove the company’s valuation as high as US$2.7 billion, giving it ‘double-unicorn’ status at the end of 2020 (see $222m round values Graphcore at over $2.7bn).

However, company accounts for the year ended 31 December 2021 highlight the burn-rate for the company. Graphcore made a loss before tax of US$183.5 million on sales of just US$5.0 million in the year. The accounts show cash, cash equivalents and short-term investments on hand of US$327.0 million at the end of 2021.

A company spokesperson denied that Graphcore was undergoing a pivot away from chip and hardware development and towards AI-as-a-service. He said any move towards AI-as-a-service was complementary to Graphcore’s hardware and software development efforts.

“Cloud-based AI as a service has been the direction of travel for some time,” the spokesperson said referencing a number of partnerships made with cloud service providers. However, the spokesperson added: “We are very much engaged in the next generation of IPU systems.”