Nvidia and AMD may face entirely new threat from $100 billion firm — will OpenAI end up buying Graphcore to build its own chips?
The once bullish startup is now struggling to stay afloat, with OpenAI keen to get in the chips business
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Graphcore, the chipmaking startup that once countedMicrosoftamong its customers, may struggle to stay afloat unless it pulls in millions of dollars in financing within the next few months, according to its latest accounts.
Although the explosion of the AI industry means chips are in high-demand, Graphcore hasn’t been able to capitalize on this. The UK-based unicorn was once considered a key rival to the likes ofNvidiaandAMD, having achieved avaluation of $2.5 billion in 2020following its latest funding round. But due to lower sales from “key strategic customers”, revenues have fallen, according toSifted.
To underline its woes, the company once agreed to a deal with Microsoft, itself an investor in the company, this eventually fell through when the firm decided not to continue using Graphcore’s chips in its cloud computing systems.
Could OpenAI be Graphcore’s savior and shake up the market?
The company has less than a year now to raise capital to continue functioning as a healthy business, according to theFinancial Times (FT), and is seeking another funding round, with discussions underway with potential investors.
In light of the AI emergence, and with the chips market really hotting upOpenAIis rumured to be seeking to make its ownAI chips, rather than run on the likes ofNvidia’s A100 GPUs to power its generative AI platforms like ChatGPT.
OpenAI has gone so far as to identify potential acquisition targets,reported Reuters, but hasn’t yet decided to move forward on any particular course of action. The main reason is that with chips in high demand, and only a handful currently mass-producing the components required to power AI workloads and LLMs, there’s a shortage.
The $100 million Silicon Valley giant has also considered building its own chip, working closely with other chipmakers – such as Nvidia – as well as diversifying its supply beyond just Nvidia, which is the industry leader. The GPU maker has an 80% stranglehold on the market right now, although challengers are beginning to emerge, and innovative solutions are in the works.
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Should OpenAI decide to invest in a chipmaking firm to build its own powerhouse to either guarantee a supply or crack open the market, it needn’t look further than Graphcore. There’s no guarantee it will, but perhaps an early investment may be on the cards as a first step into something that could potentially develop into a much bigger partnership.
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Keumars Afifi-Sabet is the Technology Editor for Live Science. He has written for a variety of publications including ITPro, The Week Digital and ComputerActive. He has worked as a technology journalist for more than five years, having previously held the role of features editor with ITPro. In his previous role, he oversaw the commissioning and publishing of long form in areas including AI, cyber security, cloud computing and digital transformation.
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