The tightened regulations, announced in October, took effect this month and are aimed at restricting China’s access to high-end semiconductor technology with US inputs, focusing on data-centre chips used to train AI.
“The recently updated US export controls mean that Graphcore – in common with other AI hardware manufacturers – is no longer able to sell [intelligence processing unit (IPU)] systems in China,” a company spokesman said in a statement to the Post.
“Regrettably, this means we will be significantly scaling back business operations in China,” he added, noting that all of the company’s top-line products had fallen under the new regulations.
Alibaba, Tencent outline ways to minimise impact of US AI chip ban on cloud growth
Alibaba, Tencent outline ways to minimise impact of US AI chip ban on cloud growth
The spokesman did not elaborate on the number of staff that would be let go in China, where it set up its Beijing headquarters in 2019.
The development is the latest setback for Graphcore, a darling of the British chip industry that some say was on its way to taking on American industry titan Nvidia, the maker of the world’s most advanced AI graphics processing units (GPUs). Founded in 2016 in Bristol, England, the company was valued at US$2.8 billion by 2020 after a US$222 million funding round.
However, Graphcore saw its revenue fall 46 per cent in 2022, with losses of US$204.6 million for the year, according to its latest financial filing in October. The company said it needed more funding to keep operating, but has not announced any new rounds.
“Elsewhere, the need for AI computing 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 spokesman said on Thursday.
Virtually no advanced chip maker has been left unscathed by the US chip export restrictions to China, which have been escalating over the last couple of years. AI has been a particular focus for Washington, forcing Nvidia to make its custom A800 and H800 GPUs just for China, which now fall under the new sanctions.
Nvidia has said it plans to again tailor new AI chips for Chinese customers, but the process will take time because of the need to formulate chips that meet those clients’ requirements without breaking the export rules.
Nvidia now expects sales to China and other US-restricted destinations – which together contributed 20 to 25 per cent of its data-centre revenues in the last few quarters – to “decline significantly” in the fourth quarter.
