Taiwan Semiconductor Manufacturing Co. (TSMC) could face a penalty of 1 billion or more to settle a U.S. export control investigation over a chip it made that ended up inside a Huawei artificial intelligence processor, according to two people familiar with the matter. The U.S. Department of Commerce has been investigating the world's biggest contract chipmaker's work for China-based Sophgo, the sources said. The design company's TSMC-made chip matched one found in Huawei's high-end Ascend 910B artificial intelligence processor, according to the people, who requested anonymity because they were not authorized to speak publicly about the matter. Huawei -- a company at the center of China's AI chip ambitions that has been accused of sanctions busting and trade secret theft -- is on a U.S. trade list that restricts it from receiving goods made with U.S. technology. TSMC made nearly 3 million chips in recent years that matched the design ordered by Sophgo and likely ended up with Huawei, according to Lennart Heim, a researcher at RAND's Technology and Security and Policy Center in Arlington, Virginia, who is tracking Chinese developments in AI.

Graphcore has today announced a $50 million Series C funding round by Sequoia Capital as the machine intelligence company prepares to ship its first Intelligence Processing Unit (IPU) products to early access customers at the start of 2018. The Series C round enables Graphcore to significantly accelerate growth to meet the expected global demand for its machine intelligence processor. The funding will be dedicated to scaling up production, building a community of developers around the Poplar software platform, driving Graphcore's extended product roadmap, and investing in its Palo Alto-based US team to help support customers. Nigel Toon, CEO at Graphcore said: "Efficient AI processing power is rapidly becoming the most sought-after resource in the technological world. We believe our IPU technology will become the worldwide standard for machine intelligence compute. The performance of Graphcore's processor, compared to other accelerators, is going to be transformative, whether you are a medical researcher, roboticist, online marketplace, social network or building autonomous vehicles. "At Graphcore, we are focused on building a successful, enduring company that can serve the needs of all of those communities, over the long term.

Artificial intelligence has been a growing field for tech companies and the technology is starting to make its way to consumer electronics. In a blog post Monday, Microsoft detailed plans for its HoloLens 2 mixed reality headset and confirmed that it would utilize a dedicated coprocessor for AI processing. Technologically, here's why Microsoft wants to move AI work right onto the HoloLens 2. Traditionally, companies have either offloaded AI processing onto the cloud or used the processor included in a device by default. But as AI applications have become increasingly demanding and resource-intensive, companies have run into the limitations of this approach. Especially at the consumer level, the processing time needed to bounce tasks to and from the cloud and the limits of existing hardware are hurdles to the lag-free AI performance that companies want from their devices.