Graphcore Halts Sales of AI Chips in China Due to U.S. Export Rules

(Image credit: Future)

Graphcore, a U.K.-based designer of AI processors, is scaling down its workforce and ceasing its sales in China due to the latest U.S. export restrictions to the People's Republic. This adds to a growing list of challenges for the company as it struggles to compete with bigger players, such as Nvidia, Intel, and AMD, in the emerging AI market.

"Regrettably, this means we will be significantly scaling back business operations in China," a Graphcore spokesperson told Bloomberg in an email. 

Meanwhile, the company remains optimistic about its future as demand for AI processors is very high in general, and Graphcore has decent hardware and software. 

"Elsewhere, the need for AI compute continues to increase, and Graphcore is working with customers around the world to meet their demand for a powerful, cost-effective alternative to GPUs," the Graphcore spokesperson said.

The company declined to share the number of employees impacted and did not disclose whether its exit from a promising market will impact its operations in the U.K. and elsewhere.

Sales of AI processors in China accounted for 20% to 25% of Graphcore's business, its chief executive Nigel Toon said at a Bloomberg Technology Conference in October. Interestingly, he highlighted China as a key growth market for Graphcore since sales of Nvidia's AI and HPC GPUs were restricted in the country. Apparently, he forgot that since Graphcore processors are developed and made using technologies that originate from the U.S., they are also subject to U.S. export controls.

The China exit is yet another trouble for Graphcore. In 2022, Graphcore's revenue plummeted by 46%, and its losses expanded by 11%, reaching $204.6 million. This downturn prompted an urgent need for additional funding, a situation acknowledged by the company. Meanwhile, Graphcore has not announced any new funding since then. Furthermore, one of Graphcore's notable investors, Sequoia Capital, wrote down its investment in the company to zero, a clear sign of dwindling confidence.

Anton Shilov
Freelance News Writer

Anton Shilov is a Freelance News Writer at Tom’s Hardware US. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.

  • bit_user
    It's interesting to hear anything about Graphcore. I had sort of hoped it was a "no news is good news" situation, but I guess not, given what a down note the article ends on.

    To be honest, I had never really delved into the nitty gritty of what they're doing. Perhaps it's a lot like the other purpose-built AI chips out there, like Tenstorrent and Cerebras, which focus on dataflow parallelism.