As was widely expected, US AI chip startup Wave Computing has now formally filed for bankruptcy...
As we reported as a possible outcome last week, Wave Computing yesterday filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Northern District of California, San Jose Division.
Wave has arranged for what’s called debtor-in-possession (DIP) financing from an affiliate of Tallwood Venture Capital totaling approximately $27.9 million. The money provides the business sufficient liquidity to continue regular business operations through the bankruptcy process.
Tallwood is the company that bought MIPS Technologies from Imagination Technologies in 2017 and brokered a subsequent deal that combined Wave Computing and MIPS. MIPS filed for bankruptcy concurrently with Wave and will remain with Wave. MIPS is a core part of the business, according to a spokesman for the company.
In a statement Wave did say it expects no disruption to existing customers and it will continue to offer the same level of service and maintenance and continue to protect its IP during the Chapter 11 process. All existing management remains in place.
The executive from the interim management consultancy working with Wave on the restructuring, Lawrence Perkins, said, “After extensive consultations and discussions with the board, creditors and advisers, we determined that restructuring Wave Computing through the Chapter 11 process was the best and most efficient way to ensure the business has the financial flexibility to pursue further commercialization of our technology and grow over the long term.”
Wave has filed a series of customary “first day” motions with the Bankruptcy Court. When granted, these motions will enable day-to-day operations, regular payment of employee wages and benefits, and payment to key vendors for goods and services provided on or after the filing date to continue as usual.
As we reported previously, we understand that MIPS — which was treated as a business unit within Wave, with intellectual property (IP) and license contracts under MIPS rather than Wave — would continue to thrive as it had continued market traction. The MIPS I-Class processor core family is thought to be the most profitable part of the business.