Bristol chip firm Graphcore seeks new investment as losses widen

Graphcore losses Image credit: T. Schneider / Shutterstock

Losses at British chip designer Graphcore widened last year, with the Bristol-based firm posting a pre-tax loss of $204.6m.

Losses for the year ended December 2022 were 11% higher than the year before, the company’s latest financial accounts show.

Revenue at the company, which designs hardware and software for intelligent processing unit (IPU) systems, was down 46%, dropping from $5m in 2021 to $2.7m last year.

Graphcore became one of the UK’s most valuable private tech firms after its $222m Series E round in 2020 landed the company with a valuation of $2.8bn.

The company said its disappointing results last year were down to wider macroeconomic headwinds that led to a “softer demand for hardware sales”. Last year, the company scaled back significantly in light of this, closing its operations in Norway, Japan and South Korea and making staff cuts in the US and UK.

Last year, Graphcore lost a deal to supply Microsoft with processors for its cloud computing platform.

Graphcore said that while hardware sales took a hit last year, it saw encouraging growth in the cloud computing market for AI workloads and it expects that market to overtake on-premises hardware sales in the coming years.

The company noted that it still remains reliant on a small number of customers for its revenue and that limited resources to support those customers may “negatively impact our customer relations”.

Graphcore’s cash flow has caused the firm to seek “further investment to finance the existing requirements over the next 12 months”.

No agreements have been reached but the company said it expects that “appropriate funding can be secured before it is required”.

UKTN has reached out to Graphcore for further comment.