South Korean professional Go player Lee Se-Dol puts his first stone against Google's Artificial Intelligence program, AlphaGo, in March 2016 in Seoul. He lost the five-match series. Google via Getty Images
South Korean professional Go player Lee Se-Dol puts his first stone against Google's Artificial Intelligence program, AlphaGo, in March 2016 in Seoul. He lost the five-match series.

Sequoia Capital Said to Back English AI Chip Startup Graphcore

Graphcore sought a valuation of about $1 billion, sources say; Venture capital funded $1.09 billion in AI startups in 3Q

Giles Turner and Lizette Chapman (Bloomberg) -- Graphcore, a U.K. startup that designs computer chips, is in advanced talks for a $50 million investment, said people with knowledge of the matter, another sign in the growing frenzy around startups linked to artificial intelligence.

Sequoia Capital is expected to lead the investment round in the startup, which makes chips specifically for artificial intelligence applications, said the people, who asked not to be identified because the discussions are private. At one point, Graphcore sought a valuation of about $1 billion, though it wasn’t able to reach that height, the people said.

Graphcore and Sequoia Capital declined to comment.

Sequoia Capital has driven few deals in Europe recently, but the planned investment from the Silicon Valley venture capital firm is a sign of the increasing investor enthusiasm over AI. 

Venture capital funds pumped in $1.09 billion in AI startups over the third quarter of 2017, the third quarter in a row where funding exceeded $1 billion, according to a joint report by PwC and CB Insights.

Graphcore raised $30 million just four months ago, when London’s Atomico valued the business at $200 million, the people said. Other investors include Demis Hassabis, co-founder of Google’s DeepMind, and Zoubin Ghahramani, the chief scientist at Uber Technologies Inc.

Graphcore’s is designing a chip specifically tailored to machine learning. Machine-learning algorithms, which can require large amounts of computing power, are often run on graphics processing units. But these chipsets, made by companies such as Nvidia Corp., were originally designed for rendering images, mostly in video games and design applications.

The additional cash would bring Graphcore’s total to around $110 million. Chief Executive Officer Nigel Toon has said his goal is to double or triple Graphcore’s 60-person team by the end of next year. The company has yet to develop a chip past the benchmark testing phase but has said it will begin selling products broadly next year.

TAGS: Business Deals
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