SoftBank Group Corp. has acquired Graphcore, a British semiconductor chipmaker, as it aims to expand into the artificial intelligence sector, the two companies announced on Friday.

The Japanese technology investor said it purchased Graphcore from investors, including Schroder British Opportunities Trust PLC, an investment fund. The financial terms of the deal were not disclosed.

SoftBank Buys UK Chipmaker : Deal Details and Financial Impact

Schroder, which first backed Graphcore in 2020, stated it will earn back its original capital investment in the company, minus expenses. The investment fund added that it valued its holding in Graphcore at a lower amount, resulting in a 22% increase based on figures from the first quarter of 2024.

Morrison Foerster LLP advised SoftBank on the deal. The global team was led by Ken Siegel, managing partner of the Tokyo office and head of the mergers and acquisitions team, along with partner Gary Brown and counsel Luke Rowland in London.

Orrick Herrington & Sutcliffe LLP represented Graphcore, with a team led by corporate partners James Connor and Chris Grew. Counsel information for Schroder was not immediately available.

Strategic Vision and Future Prospects

Vikas Parekh, managing partner at SoftBank Investment Advisers, said the acquisition reflects a rapidly growing demand for AI computing power across various sectors. "Society is embracing the opportunities offered by foundation models, generative AI applications, and new approaches to scientific discovery," Parekh stated.

Graphcore, based in Bristol, southwest England, will join a portfolio backed by SoftBank, which also includes chip designer Arm. Investors in the startup had valued Graphcore at around $2.77 billion in late 2020, with backers such as Microsoft, OpenAI co-founder Ilya Sutskever, and Baillie Gifford.

Chrysalis Investments Ltd., a British investor in Graphcore, anticipates receiving approximately $56 million from the sale of its stake. Irish venture capital firm Molten Ventures, which first invested in Graphcore in 2016, reported receiving $26 million from the deal.

SoftBank's AI Expansion

This acquisition follows SoftBank leading a $1.05 billion funding round for self-driving car company Wayve, to accelerate the development of AI-driven vehicles.

Shares in SoftBank Group, listed on the Tokyo Stock Exchange, closed at 11,395 Japanese yen ($72) on Friday. SoftBank, Graphcore, and Schroder did not immediately respond to requests for comment.