SoftBank Group Corp CEO Masayoshi Son is seeking about $100 billion to bankroll a chip venture that will rival Nvidia Corp and supply semiconductors essential for artificial intelligence (AI), Bloomberg News reported on Friday, citing people with knowledge of the matter. The project, code-named Izanagi, is a critical component of the visionary tech investor’s plans to make the world the “AI era,” the report said.
The announcement of the massive funding reflects investors’ growing enthusiasm for AI, which is being used in fields from self-driving cars to medical diagnosis. Among public companies, those with an AI business or significant product plans attract a premium over their peers. Venture capitalist Tomasz Tunguz published a blog post last week arguing that he expects the industry to be worth more than $10 trillion by 2035.
The venture will complement the chip design unit Arm Holdings Plc, which the Japanese tech investing giant took public in September. The report said the report said it would focus on delivering AI chips for data centers, smartphones, and tablets. Arm has a market capitalization of more than $30 billion and is already the supplier of processors for Apple Inc’s iPhones, which power many of the world’s most popular apps.
SoftBanks Son is one of the most high-profile investors in the world, a billionaire with a reputation for out-of-the-box gambles. His latest bet on the office-sharing startup WeWork cost the company billions in a collapse that has sent shockwaves through Silicon Valley.
It’s also been rough for the Vision Fund, which posted a $6.2 billion loss in the second quarter of fiscal 2023 tied to WeWork and other soured bets. Investors also fret about the purchase of ARM, which has little synergy with SoftBank’s other businesses and may be costly in the long run.
Nevertheless, the deal shows Son and his backers’ urgency for AI and its potential to transform industries. “AI is a fundamental sector, and I believe it will eventually become a trillion-dollar industry,” Son told a conference last month. “We are focusing on creating a new industry, with artificial general intelligence leading to the creation of a smart city and a supercomputer that is ten times more intelligent than humans.” He also predicted that generative AI would be realized within ten years. The conference heard that the technology has already been applied to robotics, virtual reality, and medical diagnosis. Founded in 1990, Arm was a joint venture by British semiconductor firms Acorn Computers, VLSI Technology, and what was then Apple. SoftBank acquired the company in 2016 for $32 billion. Its shares are listed on the London and Nasdaq stock exchanges. Son, the company’s chairman and chief executive officer, owns about 930 million shares or roughly 90% of the chip designer’s outstanding stock. It’s a small portion of his fortune, estimated at $25 billion. The company’s IPO is scheduled for Monday, valued at about $15 billion.
