On November 23, Bloomberg reported that British AI chip design company Graphcore will lay off most of its employees and stop sales in China.

Graphcore confirmed the decision, citing recent U.S. export controls restricting the sale of technology to China. "Unfortunately, this means we will significantly scale back our operations in China," a spokesperson said in an email. The company declined to disclose the number of employees affected.

Founded in 2016, Graphcore makes artificial intelligence (AI) chips called intelligent processor units (IPUs) and aims to challenge Nvidia. Due to the high demand for Nvidia's equipment, investors have poured money into the startup to find viable alternatives to Nvidia. In 2020, Graphcore raised $222 million at a $2.8 billion valuation, making it one of the most promising startups in the UK.

The company, headquartered in Bristol, southwest England, is seen by some as potential competition for GPU giant Nvidia in the artificial intelligence accelerator field with its intelligent processor unit (IPU) hardware, related Poplar software stack and IPU cloud services opponent.

According to the latest filings, the company's revenue fell 46% to $2.7 million in 2022, and its losses expanded 11% to $204.6 million. In October, Graphcore disclosed forecasts for 2027 that it would need to raise more capital to break even. The company is in financing talks with investors but has not yet reached an agreement.

Venture capital firm Sequoia Capital, one of Graphcore's most prominent backers, has reportedly written down the value of its stake in the startup to zero.

Graphcore CEO Nigel Toon has previously pointed to China as a potential growth market, especially since trade war restrictions have hampered Nvidia's ability to sell products into the country. Speaking at the Bloomberg Technology Conference in London in October, Toon said sales from China "probably account for 20% to 25% of his company's business."

Previously, Graphcore had closed operations in Norway, Japan and South Korea and reduced its operations in other countries. Accounts filed with UK companies repository Companies House confirmed staff numbers fell from 631 in 2021 to 494 last year.

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