SoftBank Group’s founder, Masayoshi Son, is on a quest for $100 billion to propel his latest venture, codenamed Izanagi, into the fiercely competitive arena of artificial intelligence (AI) chips, directly challenging the supremacy of Nvidia. According to a recent Bloomberg report, Izanagi will forge a strategic partnership with Arm, a chip design company previously spun off by SoftBank as a public entity.
As of the latest records, SoftBank retains approximately 90% ownership of Arm’s shares, providing a substantial foundation for this audacious venture. In a move reminiscent of SoftBank’s successful fundraising strategy for the Vision Fund, the company intends to secure a substantial portion of Izanagi’s $100 billion funding from Middle Eastern institutional investors, amounting to around $70 billion. SoftBank itself is poised to inject the remaining $30 billion into this high-stakes initiative.
When contacted for comment, a SoftBank spokesperson remained tight-lipped about the details disclosed in the report, adding an air of mystery and anticipation to the unfolding narrative.
Nvidia, a current giant in the AI chip market, dominates with its GPU chips. However, as the demand for AI processors is projected to surge, an opportunity emerges for other companies to vie for market share by presenting alternatives—whether through similar GPUs, novel GPU approaches, or entirely distinct processing methodologies.
Notably, OpenAI CEO Sam Altman is reportedly engaging in discussions with investors in the United Arab Emirates to raise an impressive $5 trillion to $7 trillion for a distinct AI chip project. OpenAI’s involvement in generative AI, exemplified by models like GPT powering services such as ChatGPT, positions the company as one of the world’s largest consumers of such chips.
The report suggests that Izanagi is distinct from Altman’s initiative, emphasizing the multifaceted landscape of AI chip development currently unfolding.
Details surrounding SoftBank’s Izanagi remain elusive, including critical aspects such as the companies slated to lead core technology development and a comprehensive timeline for the venture’s progression.
This substantial pivot toward AI aligns with SoftBank’s strategic shift away from its historical reliance on Alibaba, marking a new era for the conglomerate. The move stems from a proactive stance against the looming AI revolution, as articulated by SoftBank’s Chief Financial Officer Yoshimitsu Goto in March 2023. Gradually divesting from Alibaba, SoftBank has redirected its resources into the burgeoning field of AI.
The company’s recovery, facilitated by its 90% stake in Arm, was underscored by a robust performance in the Vision Fund, marking the highest return since March 2021. Arm’s stock witnessed a meteoric rise of nearly 50%, fueled by escalating demand for AI chips, with notable customers including industry giants like Apple, Google, Microsoft, and Amazon.
SoftBank’s foray into the AI chip landscape positions itself as a potent player, with Arm emerging as a linchpin for the future of artificial intelligence. The revelation of Son’s Izanagi project catalyzed a 2.8% surge in SoftBank shares, signaling heightened investor confidence in the company’s strategic pivot. The unfolding narrative promises to reshape the dynamics of the AI industry, with Izanagi poised to be a formidable contender against established players like Nvidia.
Source https://techcrunch.com/2024/02/19/softbanks-masayoshi-son-is-reportedly-seeking-100b-to-build-a-new-ai-chip-venture/