SoftBank’s Graphcore plans $1.3 billion chip investment in India

British chip designer Graphcore, owned by SoftBank Group Corp, plans to announce a £1 billion ($1.3 billion) investment package in India that also includes a new research center.

The announcement is scheduled as part of a delegation of British businesses joining Prime Minister Keir Starmer on a visit to India this week, people familiar with the plans said. Graphcore, which is based in Bristol, plans to open a research facility in Bengaluru and hire more than 500 people over the next five years, said one of the people, who asked not to be identified because the discussions were private.

Graphcore and SoftBank declined to comment.

Graphcore started out as a promising potential rival to Nvidia Corp., which designed specialized chips to develop artificial intelligence services. Investors gave the startup a $2.8 billion valuation in 2020, but Graphcore struggled to gain commercial traction.

SoftBank bought the company for an undisclosed amount in 2024, part of founder Masayoshi Son’s ambitious plan to capitalize on the spending frenzy around AI infrastructure. Following the SoftBank acquisition, Graphcore said it would increase its hiring in the UK and globally.

India has emerged as a potentially major AI region, with the country of 1.4 billion adopting the technology across industries including agriculture, education and manufacturing to increase efficiency. While that still accounts for a small share of their revenues, global tech companies from Nvidia to Microsoft Corp and Meta Platform Inc are betting on the fast-growing economy as a growth market that could emerge as an alternative to China.

US tensions with China have helped India gain prominence among global tech companies, but its AI infrastructure is still developing. Prime Minister Narendra Modi wants to set up a domestic semiconductor industry and hopes to have the first chips made in India on the market by the end of the year, though the country’s initial target is less-advanced products.

The Modi government has set up an $8.6 billion fund to attract international chip makers. However, no major semiconductor firm has committed to major investment in the country. Its two biggest projects include an $11 billion wafer fabrication site by Tata Group in partnership with Taiwan’s Powerchip Semiconductor Manufacturing Corp. and a nearly $3 billion assembly and test facility by US-based Micron Technology Inc.

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