Nvidia and AMD might be confronted with brand new challenges from the $100 billion-plus firm — but will OpenAI be able to purchase Graphcore to develop their own chip?

  • October 15, 2023
  • 3 min read

Graphcore the chipmaker startup that used to have Microsoft as one of its customers, is likely to have a hard time staying afloat without an influx of millions of dollars of funding in the coming months, based on the company’s latest financial statements.

Despite the rapid growth of the AI industry has means that chips are in high demand, Graphcore hasn’t been able to profit from this. The company based in the UK was considered to be a significant competitor to companies like Nvidia as well as AMD having a value at $2.5 billion for 2020 after its most recent funding round. However, due to a decline in revenue in the form of “key important strategic buyers” revenue has dropped in the words of the Sifted.

To make it clear how bad the situation is The company had previously agreed to contract with Microsoft which is an investor. but the deal fell through after the company decided not to use the Graphcore chips for the cloud-based computing system.

Does OpenAI be Graphcore’s saving grace and change the face of the market?

The company is down to one year to raise funds to keep running as a healthy company as per The Financial Times (FT) and is in the process of seeking another round of funding that is currently in discussions about potential buyers.

In light of the AI rise, and the chip market heating up OpenAI is believed to be attempting to create it own AI chips, instead of being based on Nvidia’s A100 GPUs for its AI-powered generative AI platforms such as ChatGPT.

OpenAI has gone as that it has identified potential acquisition potential targets, reported Reuters however, it isn’t able to decide yet ahead with a specific course of decision. The reason behind this is the demand for chips is high and only a few are currently producing the components needed to provide the power to AI applications and LLMs There’s a lack of.

A $100-million Silicon Valley giant has also contemplated building its own chips as well as working with other chipmakers, including Nvidia and diversifying its product offerings beyond Nvidia which is the leading industry player. The GPU maker holds an 80% hold over the market today but challengers are starting to emerge and novel solutions are currently in development.

If OpenAI chooses to make an investment in a chipmaking company to create its own powerhouse in order to ensure a supply or to the marketplace, then it shouldn’t consider anything other than Graphcore. It’s not certain if it will, but the possibility of an investment early on is in the works as a way to start something that could develop into a larger collaboration.

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