SoftBank-Owned ARM To Develop AI Chips

SoftBank-owned chip designer ARM Holdings is to develop artificial intelligence (AI) chips, with the first products due out next year, as part of a broader AI push by SoftBank chairman and chief executive Masayoshi Son, Nikkei reported.

ARM is to set up an AI chip division and produce a prototype by spring 2025, with mass production beginning with contract chip makers in the autumn, the report said.

The chip subsidiary, which is 90 percent owned by SoftBank, is to cover hundreds of billions of yen in initial startup costs, and could spin off the AI division under SoftBank once it has reached mass production.

SoftBank is currently negotiating with contract chip firms including Taiwan Semiconductor Manufacturing Co. (TSMC) as it looks to secure capacity.

Cash reserves

SoftBank showed a second straight quarter of profitability in results delivered on Monday in part due to an investment boom in AI.

The company’s net income reached a better-than-expected 231.1 billion yen ($1.4bn, £1.2bn) in the quarter to March compared with a loss of 57.6bn yen a year earlier. The company’s full-year net loss of 227.7bn yen beat expectations.

Shares in ARM roughly doubled in February on expectations that it would benefit from the AI boom and remain up 67 percent so far this year. ARM held an IPO on the Nasdaq exchange last September.

SoftBank has sold off or written down billions of dollars in publicly listed holdings in recent years as Son prepares for large investments to change the company’s focus.

The company said it had cash holdings of 6.2tn yen as of the end of March with which to fund new investments.

AI data centres

The firm is in talks to acquire British semiconductor start-up Graphcore, Bloomberg reported, and earlier this month led a $1.05bn funding round for UK self-driving start-up Wayve Technologies.

SoftBank is planning to build AI data centres using ARM’s upcoming chips in the US, Europe, Asia and the Middle East as early as 2026, according to Nikkei.

The firm is branching out into power generation in order to meet those data centres’ heavy power demands, with plans to build wind and solar power farms and eyeing next-generation fusion power.

In February SoftBank said it would establish a robotics joint venture with a unit of Saudi Arabia’s wealth fund, another area which Son wants to combine with AI.

Including SoftBank’s own investments and funds from sovereign wealth funds and others, investment into the AI shift is expected to reach 10tn yen, Nikkei said.

Start-ups and major chip makers including Intel and AMD are also developing AI chips to compete with those of market leader Nvidia.