SoftBank's Arm plans to launch AI chips in 2025
TOKYO/LONDON -- SoftBank Group subsidiary Arm will foray into the development of artificial intelligence chips, seeking to launch the first products next year.
The move is part of SoftBank Group CEO Masayoshi Son's 10 trillion yen ($64 billion) push to transform the group into a sprawling AI powerhouse.
U.K.-based Arm will set up an AI chip division, aiming to build a prototype by spring 2025. Mass production, to be handled by contract manufacturers, is expected to start in the fall of that year.
Arm already supplies circuit designs called architecture to Nvidia and other chip developers. The company holds an over 90% share in architecture for processors used in smartphones.
Arm, in which SoftBank owns a 90% stake, will shoulder initial development costs, expected to reach hundreds of billions of yen, with SoftBank also contributing. Once a mass-production system is established, the AI chip business could be spun off and placed under SoftBank.
SoftBank is already negotiating with Taiwan Semiconductor Manufacturing Corp. and others over manufacturing, looking to secure production capacity.
Under Son's vision of an AI revolution, SoftBank aims to expand to data centers, robots and power generation. He envisions bringing together the latest AI, semiconductor and robotics technologies to spur innovation in various industries. AI chips that can process large volumes of data is at the core of that project.
The ambitious bet stems from Son's deep faith in the power of AI.
AI exceeding human intellectual capability "can solve problems, like asking a crystal ball to tell the future," said Son at a symposium in July. "Japan needs to make the brightest crystal ball at the center."
He then travelled across the world to realize that vision while skipping earnings announcements. He visited chip hubs in Taiwan and the U.S. and also met with executives of companies expected to cooperate with SoftBank's initiative.
He has also set sights on artificial general intelligence, which is expected to assist humans in such areas as shipping, pharmaceuticals, finance, manufacturing and logistics.
The market for AI chips is expected to see accelerated growth.
Estimated at $30 billion this year, the market is expected to exceed $100 billion in 2029 and top $200 billion in 2032, according to Precedence Research of Canada. Nvidia currently leads the field but cannot keep up with growing demand. SoftBank sees an opportunity.
The mainstay investment business has recovered, giving the company the financial muscle to go on the offensive. The company is expected to announce a great improvement in the bottom line from a nearly 1 trillion yen loss a year earlier in a fiscal 2023 earnings report on Monday. The balance sheets will likely show ample cash on hand.
SoftBank plans to build data centers equipped with homegrown chips in the U.S., Europe, Asia and the Middle East as early as 2026. As data centers require huge amounts of power, the company will branch out into power generation as well. It is planning to build wind and solar power farms, with eye on next-generation fusion technology.
The group announced a plan in February to establish a robotics joint venture with a unit of Saudi Arabia's sovereign wealth fund.
Mergers and acquisitions are also being pursued. Including its own funds and investments from sovereign wealth funds and others, with total investment is expected to reach 10 trillion yen.
SoftBank has switched mainstay businesses in the past to keep up with technological advances. It operated an internet business in the late 1990s through a joint venture with Yahoo of the U.S.
In the late 2000s, it shifted to the mobile business by acquiring U.K. company Vodafone and U.S. company Spring. Now SoftBank will attempt a transformation into an AI-centered group.
But big investments come with risks, Son's business acumen will be tested again in pursuing his vision.