U.K.’s Graphcore Close to Raising Funds At Over $2 Billion Value

Graphcore Ltd. is said to be close to raising new funds, benefiting from investor interest in companies that focus on cutting-edge semiconductors, according to people familiar with matter.

U.K.-based Graphcore designs chips that are used to run artificial intelligence programs. In February the company raised $150 million, bringing its valuation to $1.95 billion. The current fund raising will boost its valuation to more than $2 billion, two of the people said, who declined to speak publicly as the talks are private.

The exact amount of the fund raise is unclear, but is understood to be about $200 million, the people said, adding that the investment round isn’t finalized and the amount could change.

A spokesman for Graphcore declined to comment.

Investor interest in the semiconductor industry has surged. Demand is being driven by owners of massive data centers that provide computing over the cloud who are looking for faster and more efficient ways to make sense of the flood of data they’re dealing with.

Companies from Alphabet Inc.’s Google to Amazon.com Inc.’s AWS are exploring new types of hardware needed to run various forms of artificial intelligence, many of which focus on computers writing their own code. An unprecedented number of industry mergers and acquisitions and a proliferation of startups are also being spurred by the stumbles of Intel Corp., which is struggling to advance technology that has dominated computing.

Programs running artificial intelligence have different requirements from traditional software. Instead of telling machines what to do step-by-step, AI learns from pools of data, making greater demands on a computer’s memory and a processor’s energy use. Chips built to run artificial intelligence programs, therefore, have to prioritize efficiency.

Graphcore has more than $200 million of cash from previous fund raising, but decided to seek extra capital due to the interest of investors, two of the people said. Current investors include Baillie Gifford, Mayfair Equity Partners, and M&G Investments. Graphcore, founded in 2016, has also previously gotten investment from Microsoft Corp., BMW AG and Samsung Electronics Co.

©2020 Bloomberg L.P.

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