The subsidiary Arm of the SoftBank Group plans to venture into the creation of artificial intelligence processors, with the aim of introducing the first products in the upcoming year.
TakeAway Points:
- As reported by Nikkei Asia, Arm plans to establish an AI chip business and begin building a prototype by spring 2025.
- According to the report, SoftBank is in talks to produce the AI chips with contract manufacturers, such as Taiwan’s TSMC. Fall 2025 is when mass production is expected to start.
- Based on LSEG data, Arm’s market value is over $113 billion, with shares up roughly 45% so far this year.
Arm Moves for AI Chip Business
The action is part of Masayoshi Son, the CEO of SoftBank Group,’s 10 trillion yen ($64 billion) plan to turn the company into a massive AI powerhouse.
Arm, a U.K.-based company, plans to establish an AI chip business and create a prototype by the spring of 2025. The fall of that year is when mass production—which will be managed by contract manufacturers—is anticipated to begin.
Arm already provides Nvidia and other chip makers with circuit designs known as architectures. With regard to CPU architecture for smartphones, the company has a market share of more than 90%.
Arm, in which SoftBank holds a 90% share, will pay for the majority of the projected hundreds of billions of yen in initial development expenditures. The AI chip company may be split off and merged with SoftBank once a mass-production mechanism has been built.
Softbank Negotiates with Manufacturing Companies
In an effort to acquire production capacity, SoftBank has already begun negotiating manufacturing with companies such as Taiwan Semiconductor Manufacturing Corp.
As part of Son’s AI revolution, SoftBank plans to go into data centres, robotics, and power generation. He wants to combine the newest advancements in robots, semiconductors, and AI to promote innovation across a range of sectors. Large-scale data processing AI chips are the foundation of that endeavour.
Sofbank Believes in the Power of AI
“AI can solve difficulties, like asking a crystal ball to reveal the future. The brightest crystal ball at the centre needs to be made in Japan.” Son stated At a conference in July.
Then, eschewing earnings releases, he traversed the globe to carry out that ambition. He spoke with executives from businesses anticipated to support SoftBank’s initiative, in addition to seeing chip hubs in Taiwan and the United States.
Additionally, his focus is on artificial general intelligence, which is predicted to help people in the fields of logistics, manufacturing, shipping, finance, and medicine.
Accelerated Growth is Anticipated in the AI Chip Market
Precedence Research of Canada projects that the market, which is valued at $30 billion this year, will surpass $100 billion in 2029 and reach $200 billion in 2032. Though it is currently leading the field, Nvidia is unable to meet the increasing demand. SoftBank perceives a chance.
The corporation now has the financial strength to launch an aggressive campaign because its core investment business has rebounded. In a fiscal 2023 earnings report on Monday, the corporation is anticipated to post a significant improvement in the bottom line following a nearly 1 trillion yen loss the previous year. There should be enough cash on hand, according to the balance sheets.
As early as 2026, SoftBank intends to construct data centres with domestically produced chips around the United States, Europe, Asia, and the Middle East. The company intends to venture into power generation in order to meet the massive power requirements of data centres. It intends to construct solar and wind power plants while keeping an eye on the next wave of fusion technology.
In February, the group declared its intention to form a robotics joint venture with a Saudi Arabian sovereign wealth fund unit.
Acquisitions and mergers are also being sought after. The entire amount invested, including its own money and investments from sovereign wealth funds and other sources, is anticipated to be 10 trillion yen.
Softbank Advances alongside Technology
As technology advanced, SoftBank shifted from operating a traditional business to operating a mobile business, first by acquiring U.K. company Vodafone and U.S. company Spring in the late 2000s. Now, SoftBank is attempting to transform into an AI-centered group, but large investments carry risks, so Son’s business acumen will be put to the test once more as he pursues his vision.
