SoftBank founder Masayoshi Son is actively seeking a whopping $100 billion for the launch of a groundbreaking venture named Izanagi. This venture aims to pose a formidable challenge to Nvidia, the current leader in AI chip technology, according to a recent Bloomberg report.
SoftBank intends to forge a formidable alliance with Arm, a chip design company that SoftBank took public just last year, retaining a substantial 90% ownership stake as of this month. The Izanagi project, shrouded in secrecy, is expected to revolutionize the AI chip landscape through innovative technologies and strategic partnerships.
In a pattern reminiscent of SoftBank’s Vision Fund, the company plans to procure $70 billion from Middle Eastern institutional investors, with SoftBank injecting the remaining $30 billion into the project. Despite the significance of this endeavor, a SoftBank spokesperson declined to comment when approached by TechCrunch for insights.
Nvidia currently dominates the AI chip market with its GPU chips. However, the escalating demand for AI processors coupled with the constant pursuit of efficiency and cost-effectiveness presents a ripe opportunity for new entrants to challenge the status quo. Whether through similar GPUs, novel GPU approaches, or entirely distinct processing methods, the AI chip race is poised for a paradigm shift.
Simultaneously, OpenAI CEO Sam Altman is reportedly engaging with investors in the United Arab Emirates, seeking an unprecedented $5 trillion to $7 trillion for a distinct AI chip initiative. Notably, OpenAI leads in generative AI development, making it a major consumer of these chips, which also represents a substantial portion of its expenses.
SoftBank’s Izanagi project, while ambitious, appears to be separate from Altman’s AI chip ambitions, according to Bloomberg reports. Details of Izanagi, such as core technology builders and a timeline, remain undisclosed, adding an air of anticipation to the unfolding narrative.
The move into AI marks a significant shift for SoftBank, historically garnering substantial returns from early investments and a stake in Alibaba. However, since March 2023, when CFO Yoshimitsu Goto declared SoftBank’s readiness for an “offensive” in the looming AI revolution, the company has strategically divested from Alibaba to funnel resources into AI initiatives.
This strategic shift follows a defensive maneuver after SoftBank reported a staggering $32 billion loss in its high-profile Vision Fund, designed to make the company a startup powerhouse. Nonetheless, SoftBank’s remarkable recovery, fueled in part by its 90% stake in Arm, is evident in the Vision Fund’s highest return since March 2021.
Arm, acquired by SoftBank in 2016 for $32 billion, went public on the Nasdaq in September 2023, reaching a valuation of $64 billion. Arm’s clientele extends beyond Nvidia, including tech giants such as Apple, Google, Microsoft, and Amazon, all utilizing large language models.
The revelation of Son’s Izanagi project has already impacted SoftBank’s market performance, with shares closing 2.8% higher on Monday. As the AI chip landscape evolves, Izanagi is poised to become a transformative force, challenging the established players and contributing to SoftBank’s ongoing resurgence in the tech industry.
Source https://techcrunch.com/2024/02/19/softbanks-masayoshi-son-is-reportedly-seeking-100b-to-build-a-new-ai-chip-venture/