SoftBank Group’s Masayoshi Son is reportedly seeking a whopping $100 billion to establish a new venture in the competitive arena of AI chips. The project, code-named Izanagi, is anticipated to rival industry leader Nvidia in the AI chip sector. This ambitious endeavor is set to collaborate with Arm, a chip design company that SoftBank recently spun out as a public entity, retaining approximately 90% ownership.
Key Takeaway
SoftBank’s Masayoshi Son is seeking a substantial
00 billion to establish a new AI chip venture, signaling the company’s strategic shift towards AI and its ambition to compete in the burgeoning AI chip market.
Seeking Funds
According to Bloomberg, Son plans to tap Middle East-based institutional investors for around $70 billion of the $100 billion sum, with SoftBank contributing the remaining $30 billion. This fundraising strategy mirrors the approach used for SoftBank’s Vision Fund investment funds.
Competition in the AI Chip Market
Nvidia currently dominates the AI chip market with its GPU chips. However, the increasing demand for AI processors, coupled with the need for enhanced efficiency and cost-effectiveness, presents an opportunity for new players to enter the market with alternative solutions.
OpenAI’s Involvement
OpenAI’s chief, Sam Altman, is reportedly in discussions with investors in the United Arab Emirates to secure a substantial $5 trillion to $7 trillion for a new AI chip project. OpenAI’s significant role in generative AI development positions the company as a major consumer of these chips, making it one of the largest expenses for the organization.
SoftBank’s Shift to AI
SoftBank’s foray into AI aligns with its strategic shift towards this burgeoning field. The company has been gradually divesting parts of its stake in Alibaba, redirecting the proceeds into AI investments. This move follows a significant loss in the Vision Fund, prompting the company to realign its focus and capitalize on the AI revolution.
Arm’s Role
Arm, acquired by SoftBank in 2016, has seen a surge in demand for its shares, driven by the increasing need for AI chips. The company’s customers include tech giants such as Apple, Google, Microsoft, and Amazon, emphasizing its pivotal role in the design and operation of large language models.
