SoftBank Group CEO, Masayoshi Son, is reportedly aiming to raise a whopping $100 billion for a new chip venture that will directly compete with Nvidia Corp. The project, known as Izanagi, will focus on supplying semiconductors that are crucial for artificial intelligence (AI) applications, according to sources familiar with the matter.
It is believed that SoftBank will inject $30 billion into the project, with the potential for an additional $70 billion coming from Middle Eastern institutions, as reported by Bloomberg News. SoftBank, a Japanese multinational conglomerate, has yet to respond to media requests for comments on this development.
This initiative comes as SoftBank already holds a significant 90% stake in Arm, a British chip designer that is considered vital to the field of AI. In fact, SoftBank’s CFO, Yoshimitsu Goto, recently acknowledged that Arm is set to play an indispensable role in the AI industry. Goto has previously hailed Arm as “the core of the core” among SoftBank’s portfolio of companies.
Arm executives have also indicated that there is a strong demand for their central processors, which complement Nvidia’s chips for AI work in data centers. Nvidia is a renowned American technology company that specializes in graphics processing units (GPUs) and AI-related solutions.
SoftBank has gained a reputation for its large-scale investments in the technology sector, often placing high conviction bets on startups. However, following the impact of the COVID-19 pandemic, which led to plummeting valuations and decreased investor risk appetite, SoftBank adopted a more defensive strategy.
Fortunately, SoftBank was recently able to report a return to profit after five consecutive quarters of losses. The company’s positive performance was largely attributed to an upturn in its portfolio companies, providing a much-needed boost to the Japanese tech investment firm.
If SoftBank’s endeavor to raise $100 billion for its chip venture is successful, it will mark another significant move by the company in the technology industry. With the global demand for AI solutions constantly growing, the timing seems opportune for SoftBank to pursue this ambitious project.
As SoftBank continues to navigate the ever-evolving technology sector, the success of its chip venture will depend on various factors, including the ability to attract substantial investments, establishing strong partnerships, and delivering cutting-edge semiconductor solutions. The market will keenly observe SoftBank’s progress in this new venture and its potential impact on the chip industry.
