SoftBank Group founder Masayoshi Son is actively seeking $100 billion to propel a revolutionary venture into the realm of artificial intelligence (AI) chips. Codenamed Izanagi, this ambitious project is poised to challenge the dominance of Nvidia, a current titan in the AI chip market.
Partnering with Arm, a chip design company spun off by SoftBank as a public entity last year, Izanagi aims to leverage its parent company’s 90% ownership of Arm’s shares. The strategy mirrors SoftBank’s past success with the Vision Fund, wherein the company plans to secure $70 billion from Middle Eastern institutional investors, while contributing the remaining $30 billion from its own coffers.
While a SoftBank spokesperson remained tight-lipped about the report, industry observers speculate that Izanagi could emerge as a formidable competitor to Nvidia, which currently holds sway in the AI chip domain with its GPU chips. As the demand for AI processors is projected to escalate, there is a tangible opportunity for companies to vie for market share by offering alternatives or pioneering new approaches to GPU technology.
Notably, SoftBank’s strategic shift towards AI aligns with a broader industry trend, exemplified by OpenAI’s CEO Sam Altman’s pursuit of $5 trillion to $7 trillion in funding for an AI chip project. OpenAI’s focus on generative AI, epitomized by models like GPT, positions the company as a significant buyer of AI chips and underscores the increasing importance of these chips in modern technology.
The Izanagi project, while aligning with SoftBank’s newfound focus on AI, stands apart from Altman’s ambitions. Despite the lack of specific details regarding core technology builders or timelines, the venture symbolizes SoftBank’s commitment to capitalizing on the AI revolution.
SoftBank’s strategic pivot towards AI comes in the wake of divestment from Alibaba, historically a major source of returns for the company. The move, described by CFO Yoshimitsu Goto as an “offensive” response to the impending AI revolution, follows a $32 billion loss in the Vision Fund in 2023. The company’s rebound, facilitated by its 90% stake in Arm, manifested in the highest return from the Vision Fund since March 2021.
Arm’s IPO on the Nasdaq in September 2023, valuing the British chip developer at $64 billion, has fueled its prominence. Arm’s clientele includes tech giants such as Apple, Google, Microsoft, and Amazon, reinforcing SoftBank’s strategic positioning in the AI chip landscape.
As Masayoshi Son’s vision for Izanagi takes shape, SoftBank’s foray into AI chips could usher in a new era of innovation and competition, challenging established players and reshaping the dynamics of the burgeoning AI industry. The revelation of Son’s AI chip project has already impacted SoftBank’s stock positively, indicating the market’s acknowledgment of the potential significance of this ambitious venture.
Source: TechCrunch