Japanese deal for AI champion Graphcore faces national security review

A proposed Japanese takeover of the British artificial intelligence company Graphcore is under a national security review due to concerns about foreign acquisitions of sensitive UK technology. SoftBank, the Tokyo-based tech conglomerate that owns a majority stake in semiconductor company Arm, is involved in the deal. The government review, conducted by the Business Department’s investment security unit, is the final step before the tie-up is announced. The deal is expected to be over $500 million, significantly less than Graphcore's 2020 valuation of $2.8 billion. Graphcore, known for developing semiconductors for AI software, has faced challenges in the market dominated by Nvidia. Despite raising substantial funds, Graphcore's revenues dropped in 2022, prompting the need for new funding. SoftBank's interest in AI companies, including Graphcore, aligns with its investment strategy. The outcome of the deal and its impact on shareholders remain uncertain as negotiations progress.