LONDON, July 12 (Reuters) - Japan's SoftBank Group ( SFTBF )

has bought artificial intelligence chipmaker Graphcore

for an undisclosed sum, ending long-running speculation over the

company's future.

Once touted as a rival to Nvidia ( NVDA ), which has seen

its own valuation skyrocket thanks to soaring demand for AI

computer chips, Britain's Graphcore has struggled to secure the

investment needed to compete.

Valued at $2.77 billion at the end of 2020, a filing

published last year revealed Graphcore needed more cash to break

even, after cutting its headcount by a fifth to 494 employees,

and shutting down operations in Norway, Japan, and South Korea.

Speaking at a media briefing on Thursday, cofounder and CEO

Nigel Toon said the SoftBank deal would provide Graphcore with

the resources needed to compete at a global level, but conceded

the company had faced difficulties.

"The piece that surprised us was the speed at which this has

taken off, and the scale that is involved," Toon said.

"This is a level of investment that is utterly massive.

Graphcore, as a modestly-sized company compared to those we're

competing with, has actually managed to go toe-to-toe and build

world-class technology."

Toon, who will stay on in his role, declined to comment when

asked how much SoftBank had paid for the company.

Reflecting on the state of the British tech industry, Toon

cited British pension funds' historic unwillingness to invest in

fast-growing startups as a barrier to growth.

"There's a massive opportunity here, but there's a lot of

structural things that still need to be fixed," he said.

"If you look at where our money came from, some of it came

from the UK, but the majority of it came from other regions.

That's the reality of it, and that's the piece that we're going

to need to fix, going forward."

Asked about a potential team-up with Arm Holdings, the

leading chip designer also owned by SoftBank, Toon said

Graphcore would work with partners across its parent company's

portfolio.