Masayoshi Son, of SoftBank Group, has stated his intention to invest more in the hot AI field. He’s collecting money for his next strategic move. According to Bloomberg, the SoftBank founder wants $100 billion to start an AI chip company to compete with Nvidia.
A new business called Izanagi would work with Arm, SoftBank’s semiconductor design firm that went public last year. This month, it holds 90% of Arm stock.
As SoftBank did with its massive Vision Fund investment funds, the article stated it wants to engage Middle Eastern institutional investors for $70 billion of the $100 billion total. SoftBank would pay the remaining $30 billion.
When Eltrys contacted a SoftBank spokeswoman, she declined to comment on the allegation.
GPU chips from Nvidia dominate the AI chip industry. However, with the demand for AI processors expected to rise and much work still needed to improve efficiency and cost, others can compete with like-for-like GPUs, new GPU approaches, or a different processing approach.
OpenAI CEO Sam Altman is also allegedly in negotiations with UAE investors to finance $5 trillion to $7 trillion for a new AI chip project. OpenAI has led generative AI development for its own services, like ChatGPT, and other services using its GPT models.
OpenAI is one of the world’s largest clients for these chips, making it one of its top costs. Altman allegedly spoke with possible investors, chip industry experts, and others worldwide, including SoftBank’s Son, for the AI chip venture. Izanagi looks to be different from Altman’s AI chip aspirations, Bloomberg reported.
Which businesses will construct the basic technology and deadlines for SoftBank’s new initiative are unknown.
Change the emphasis from Alibaba to AI.
A new semiconductor project would fit the company’s AI strategy.
SoftBank has earned more than $70 billion from its early investment and share in Alibaba. SoftBank has been selling off sections of its stock to reinvest in AI since March 2023, when chief financial officer Yoshimitus Goto warned the business was “getting ready to go on the offensive with the AI revolution on the horizon.”.
Goto’s comment called the move into AI offensive, but it was also defensive: it came a year after SoftBank reported a $32 billion loss in the Vision Fund, its high-profile, high-stakes effort to dominate juggernaut startups.
SoftBank has recovered owing to its 90% Arm ownership. The Vision Fund’s last-quarter returns were the greatest since March 2021, and AI chip demand has boosted Arm’s shares by over 50%. It also helps that Arm’s client Nvidia has a share in the chip design business, which caused Arm’s stock to rise last week. “Arms would soon be indispensable to AI,” Goto said last month.
SoftBank purchased Arm for $32 billion in 2016, and its September 2023 Nasdaq IPO valued the British chip designer at $54.5 billion.
Arm helps smartphone and chip companies like Apple, Google, Microsoft, and Amazon create and run massive language models, along with Nvidia.
Vision Fund earnings helped SoftBank achieve its first quarterly profit for the quarter ending December 31, 2023, almost three years after four consecutive losses. SoftBank shares rose 2.8% on Monday following Son’s AI chip project announcement on Saturday.
