SoftBank’s Masayoshi Son is reportedly seeking $100B to build a new AI chip venture 

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SoftBank Group’s Masayoshi Son has made no secret of his intent to double down on red-hot synthetic intelligence business. Now, he’s fundraising for his subsequent transfer in that technique. In keeping with a report in Bloomberg, the SoftBank founder is in search of $100 billion to construct a brand new enterprise that will compete with the likes of Nvidia within the space of AI chips.  

Code-named Izanagi, the brand new enterprise would collaborate with Arm, the chip design firm that SoftBank spun out as a public firm final 12 months. It nonetheless owns about 90% of the Arm’s inventory as of this month.  

Following a number of the similar playbook that SoftBank used when pulling collectively its outsized Imaginative and prescient Fund funding funds, the report mentioned that it plans to faucet Center East-based institutional traders for about $70 billion of the $100 billion sum. SoftBank itself would foot the remaining $30 billion itself. 

When contacted by TechCrunch for a response to the report, a SoftBank spokesperson declined to remark.

Nvidia presently dominates the AI chip market with its GPU chips. However with the necessity for AI processors projected solely to develop — and with much more work to be completed to enhance effectivity and price — there’s a transparent opening for others to compete with options, whether or not they’re like-for-like GPUs, new approaches to GPUs or a completely totally different processing strategy altogether.

OpenAI chief Sam Altman is reportedly also in talks with traders within the United Arab Emirates to lift an eye-watering $5 trillion to $7 trillion for a brand new AI chip mission. OpenAI’s efforts are notably notable as a result of the corporate has been main the cost in generative AI improvement, each to energy different providers with its GPT fashions, and to energy its personal providers like ChatGPT.

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All that makes OpenAI one of many greatest clients on the planet proper now for these chips, and makes chips one in all OpenAI’s greatest bills. Altman has reportedly met with various potential traders, chip business consultants and others throughout the globe, together with SoftBank’s Son, for the brand new AI chip initiative. It seems that the Izanagi mission is separate from Altman’s AI chip ambition, the Bloomberg report mentioned. 

The small print of the SoftBank’s new mission haven’t been disclosed, together with which firms would construct the core know-how and timelines. 

Shift focus (from Alibaba) to AI

A brand new chip mission could be line with the corporate’s new concentrate on AI. 

SoftBank has traditionally made an enormous a part of its strongest returns from its early funding and stake in Chinese language e-commerce titan Alibaba, which has yielded it greater than $70 billion through the years. However since March 2023 — when, SoftBank chief financial officer Yoshimitus Goto said that the corporate was “on the point of go on the offensive with the AI revolution on the horizon” — it’s been step by step promoting off components of its stake to reinvest the cash into AI.

The transfer into AI might have been characterised as offensive going by Goto’s remark, nevertheless it was additionally defensive: it got here a few 12 months after SoftBank reported a $32 billion loss within the Imaginative and prescient Fund, its high-profile, high-stakes effort to turn into a significant participant and kingmaker on the planet of juggernaut startups

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But SoftBank, thanks partially to that 90% remaining stake in Arm, has seen a strong restoration. Returns for the Imaginative and prescient Fund within the final quarter have been the very best for the reason that March 2021, and Arm’s shares have soared almost 50% because of rising demand for AI chips. (It helps too that Nvidia, one of Arm’s customers, has a stake within the chip design agency, a disclosure that led to a spike in Arm’s value final week.) “Arm would soon be indispensable to AI,” Goto claimed earlier this month.

Arm, acquired by SoftBank in 2016 for $32 billion, listed on Nasdaq in September 2023, with the IPO valuing the British chip design firm at $54.5 billion

Arm’s clients, along with Nvidia, embrace smartphone makers and chip designers, together with Apple, Google, Microsoft, and Amazon within the designing and operation of enormous language fashions

SoftBank posted its first quarterly revenue for the quarter that ended December 31, 2023, almost three years after 4 straight losses, helped by positive aspects at its Imaginative and prescient Fund. Shares of SoftBank closed 2.8% larger on Monday after Son’s AI chip mission information broke on Saturday.

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