Graphcore has had to pull out of China in the face of US export controls, reports Bloomberg.

The British chipmaker is laying off most of its staff in China, and discontinuing sales in the country, in another setback to the already struggling company.

"The recently updated US Export Controls means that Graphcore – in common with other AI hardware manufacturers – is no longer able to sell IPU systems in China. Regrettably, this means we will be significantly scaling back business operations in China," the company said in a statement.

Graphcore's CEO Nigel Toon had previously voiced that China might be a growth market for the company since restrictions were limiting Nvidia's ability to sell into the country. China, according to Toon, accounts for 20 to 25 percent of Graphcore's sales.

Despite being a British company, Graphcore is impacted by the US ban as the restrictions also include American manufacturing and design tools used elsewhere.

The company, based in Bristol, England, shared in a Companies House filing in October 2023 that it urgently needed to raise funds, and faced "material uncertainty" over whether it could continue operations without financing. No such fundraising has been announced in the month since.

Graphcore is particularly known for its Intelligence Processing Units (IPUs) which have been touted as a potential competition to Nvidia's GPUs. Despite being competitive in chip performance, the company has struggled to match Nvidia's growth.

In July 2023, Gcore launched an AI Cloud cluster in Newport, Wales, using the Graphcore IPUs, having already deployed similar PoPs in the Netherlands and Luxembourg.