SoftBank Group’s Masayoshi Son has big plans for the artificial intelligence industry. Fueling his ambitions, he is currently raising $100 billion for a new venture codenamed Izanagi. With this project, he hopes to rival the dominant Nvidia in the AI chip market.
The venture will be a collaboration with Arm, a chip design company that SoftBank recently spun out as a public company. Although it still owns 90% of Arm’s stock, SoftBank plans to tap Middle East-based institutional investors for $70 billion of the $100 billion needed. The remaining $30 billion will come from SoftBank itself.
Taking a page from the playbook used for the Vision Fund investments, the company plans to seek funding from potential investors and industry experts worldwide. One notable figure reportedly involved in similar talks is Sam Altman, OpenAI’s chief. He is in discussions with United Arab Emirates investors to raise an incredible $5-7 trillion for an AI chip project. OpenAI is a leader in generative AI development and is one of the largest customers of these chips.
The details of SoftBank’s new project are still under wraps. It’s unclear which companies will contribute to the core technology and what the timeline will be.
This move into AI is part of SoftBank’s new focus, shifting away from its historically successful investment in Alibaba. CFO Yoshimitus Goto announced in March 2023 that the company was preparing to “go on the offensive” with the growing AI revolution. This move may also have defensive motivations, following a $32 billion loss in the Vision Fund. However, with a solid recovery and a 90% stake in Arm, SoftBank is now seeing significant returns.
In fact, the Vision Fund reported its highest returns since March 2021, and Arm’s shares have risen by 50% thanks to the demand for AI chips. Furthermore, Arm counts top companies like Apple, Google, Microsoft, and Amazon as its customers in the design and operation of large language models.
Initially acquired by SoftBank for $32 billion in 2016, Arm went public on Nasdaq in September 2023 with a valuation of $54.5 billion. With this new venture, Son is confident that Arm will become a staple in the AI world.
SoftBank announced its first quarterly profit in three years for the quarter ending December 31, 2023, thanks to gains at the Vision Fund. On Monday, the company’s shares closed 2.8% higher following news of Son’s AI chip project.
