Revenue plummets, losses deepen, massive layoffs - "British Nvidia" Graphcore seeks financing for survival.

UK chip company Graphcore, which claims to challenge NVIDIA's dominance in graphics cards, admits to widening losses and operational difficulties, stating the need to raise more funds to sustain its operations. According to a disclosure statement submitted by Graphcore to the UK Companies House on the 4th, the company is in negotiations with potential investors but has not reached an agreement yet. The statement also indicates that the company's pre-tax losses increased by 11% YoY to $204.6 million last year, with only $157 million in cash and short-term investments on its balance sheet at the end of the year. Not only have the losses expanded, but the company also revealed that it closed its offices in Norway, Japan, and South Korea last year, reducing its workforce from 631 employees a year ago to 494 employees last year. Additionally, the company's revenue plummeted by 46% last year, partly due to significant order delays. Currently, the company's representatives refuse to comment on its financial situation. Founded in 2016, Graphcore specializes in chip design for AI projects. As one of the most promising startups in the UK, Graphcore raised $222 million at a valuation of $2.8 billion two years ago. However, the company's main semiconductor products have struggled to gain traction. In contrast, the semiconductor giant NVIDIA, which Graphcore intends to challenge, has experienced rapid growth driven by the AI boom. Nigel Toon, the founder of Graphcore, stated that the company's hardware sales were hurt by the deteriorating economic environment last year. Earlier reports indicated that Sequoia Capital has reduced its investment in Graphcore to zero. In addition, Baillie Gifford has written down its $16.6 million investment in Graphcore by 58%. In reality, Graphcore's attempt to challenge NVIDIA's dominant position in the chip industry is like a gnat trying to move a tree, as the two companies are not in the same league in terms of scale. According to Semiconductor Intelligence, NVIDIA may become the top semiconductor company in terms of revenue this year, with an estimated revenue of around $52.9 billion in 2023, double that of 2022. NVIDIA's market value has already exceeded $1 trillion, and in the second quarter of this year alone, it sold 8.16 million H100 chips, totaling $10.3 billion. In addition to its core business, NVIDIA, with its abundant funds, has been aggressively investing in 20 companies this year. On the other hand, Graphcore faces numerous challenges. Its IPU products were previously used on the Microsoft Azure platform, but there were reports last year that Graphcore's collaboration with Microsoft had fallen through. Currently, most of the AI chips used on the Microsoft Azure platform are from NVIDIA, and Microsoft has also started producing its own chips. The macro investment environment is also unfavorable for Graphcore. Data shows that global venture capital investment in semiconductor startups was $7.8 billion in 2022, a 46% decrease from the record-breaking $14.5 billion in 2021 and a 24% decrease from 2020.