British chip designer Graphcore Ltd is laying off most of its staff and discontinuing sales in China, marking another setback for a start-up once heralded as a potential rival to Nvidia Corp.
The company confirmed the decision, citing recent US export controls that have focused primarily on limiting China’s access to high-end chips and other equipment used for artificial intelligence (AI).
“Regrettably, this means we will be significantly scaling back business operations in China,” a company spokesperson said in an e-mail.
The company declined to share the number of employees affected.
Graphcore, founded in 2016, designs semiconductors tailored to support AI software.
Investors poured money into the start-up as they searched for a viable alternative to Nvidia, whose gear is in high demand.
In 2020, Graphcore raised US$222 million at a US$2.8 billion valuation, making it one of the UK’s most promising start-ups.
However, the Bristol, England-based company has struggled to get commercial traction.
Revenue fell 46 percent year-on-year and losses widened 11 percent to US$204.6 million last year, the firm’s most recent filing showed.
The company last month said that it needed to raise funds to keep operating.
Sequoia Capital, one of Graphcore’s most notable backers, wrote down the value of its stake in the start-up to zero, the Sunday Times reported earlier this year
Graphcore chief executive officer Nigel Toon had previously pointed to China as a potential growth market, particularly as trade restrictions have hampered Nvidia’s ability to sell into the country.
At the Bloomberg Technology conference in London last month, Toon said sales from China accounted for “maybe 20 to 25 percent” of his company’s business.
“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, referring to the powerful graphics chips that Nvidia and others make.
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