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SoftBank’s Masayoshi Son Plans $100B AI Chip Venture Fund

SoftBank's founder Masayoshi Son ventures into AI with $100B Izanagi, set to compete with Nvidia, leveraging collaboration with Arm


Masayoshi Son, the founder of SoftBank, wants to raise $100 billion to launch Izanagi, a new AI chip company that will rival Nvidia. The business will work with Arm, the semiconductor design firm that SoftBank separated out last year. Even though SoftBank holds almost 90% of Arm’s equity, the new initiative is a calculated step into the rapidly expanding artificial intelligence market.

The fundraising plan, which is akin to SoftBank’s Vision Fund strategy, calls for soliciting $70 billion from institutional investors located in the Middle East, with SoftBank providing the remaining $30 billion. The objective is to make Izanagi a rival to Nvidia, which presently controls the majority of the AI chip industry with its GPU processors. There is a big potential for alternative solutions in AI as the market for AI processors grows.

Izanagi, Set to Rival Nvidia, Collaborates with Arm

Sam Altman of SoftBank OpenAI is supposedly in talks with investors to finance $5 trillion to $7 trillion for an independent project involving AI chips. OpenAI, one of the biggest users of AI processors, is leading the industry in generative AI development with models such as GPT. Although SoftBank has not revealed any information about the Izanagi project, it is not the same as Altman’s endeavor.

SoftBank Shifts Focus, Selling Alibaba Stake for AI

This strategic move by SoftBank toward AI is consistent with its emphasis on cutting-edge technologies. In the past, SoftBank’s early Alibaba investment produced significant profits. But in order to fund its AI efforts, the business has been progressively selling off a portion of its Alibaba holding since March 2023. Taking action in response to a $32 billion loss in the Vision Fund—SoftBank’s audacious plan to play a major role in the startup landscape. 

The Vision Fund has enjoyed strong gains during the recovery, which has been aided in part by a 90% holding in Arm; the most recent quarter’s returns have not been seen since March 2021. Thanks to a rise in the market for AI chips, Arm’s shares have climbed by about 50%. Yoshimitus Goto, CFO of SoftBank, highlighted the strategic significance of Arm in the AI landscape, predicting that Arm will soon be essential to AI.

In September 2023, Arm, which SoftBank had purchased for $32 billion in 2016, went public on Nasdaq, valuing the business at $54.5 billion. Key actors in the creation and operation of massive language models, including Apple, Google, Microsoft, and Amazon, are among Arm’s clientele. SoftBank’s entry into the AI chip market with the Izanagi project is a reflection of its dedication to remaining on the cutting edge of technological advancement and using its resources and calculated investments to influence the direction of the AI sector. SoftBank’s shares closed 2.8% higher after the announcement of Son’s AI chip initiative.

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