In the latest news, British chip design company Graphcore is firing most of its staff in China and halting sales there. This marks another setback for the startup, which had been seen as a potential competitor to NVIDIA.

Graphcore confirmed the decision, citing the recent escalation of U.S. export controls in China. "Unfortunately, this means we will be significantly scaling back our business operations in China." A spokesperson said in an email. The company declined to disclose the number of employees affected.

For information, UK-based AI chip unicorn Graphcore was founded in 2016 to produce artificial intelligence (AI) chips called intelligent processor units (IPUs), aiming to challenge Nvidia. With Nvidia's devices in high demand, investors have pumped money into the startup to find a viable alternative to Nvidia.In 2020, Graphcore raised $222 million at a valuation of $2.8 billion, making it one of the most promising startups in the UK.

But Graphcore has struggled to gain commercial traction. The company's revenue fell 46 per cent to $2.7 million in 2022 and losses widened 11 per cent to $204.6 million, according to its latest filing. In October this year, Graphcore disclosed projections for 2027 that it would need to raise more capital to break even. The company is in talks with investors to raise capital, but no agreement has been reached.

NVIDIA's dominance of the AI space has made it more difficult for startups to access capital, as investors are less willing to make big bets on companies competing head-to-head.

Graphcore CEO Nigel Toon has previously pointed to China as a potential growth market, not least because of the ban restrictions that have hampered Nvidia's ability to sell its products to China. Speaking at a tech conference in London in October, Nigel Toon said that sales from China "could represent 20 to 25 per cent of his company's business".

The documents reportedly show that Graphcore has previously closed operations in Norway, Japan and South Korea, and scaled back operations in other countries. Previously the documents said the workforce had fallen to 494, a 21 per cent reduction on the same period last year.

*Disclaimer: The news in this article originated from the set of micro-network, innovation in Nanjing, the relevant court official, by the YuanXinAi electronic collation, the news has not been officially confirmed, only for the purpose of communication and learning.