SoftBank’s Masayoshi Son Seeks $100B for New AI Chip Venture

NVIDIA is a name especially familiar to players in the field of AI, a company known as one that has managed to reach the inflection point of AI before any other company in the sector through its AI microchips, otherwise called GPUs.

NVIDIA asserted its dominance in the AI and semiconductor industry early on, tailoring microchips to perform advanced AI tasks and aid companies like OpenAI in their ambitious AI development projects. The industry’s reliance on NVIDIA has caused what could potentially be a big GPU shortage, however, in which the company reported lower supply levels in its 2023 fourth-quarter report.

With more and more companies now pursuing big AI projects, thus escalating the demand for GPUs, efforts to build more AI chips are being made, particularly by SoftBank Group’s CEO Masayoshi Son, who plans to build a new AI chip venture, with OpenAI CEO Sam Altman heading to the same direction.

Racing for Graphics Chips

Believing in a sooner-than-later revolution of AI and the fact that “super-intelligent AI machines” will someday significantly outshine human intelligence, Son decided to make excelling in and, if possible, dominating the field of AI chip manufacturing a major priority. Son unveiled SoftBank’s ambitious AI chip venture plan to include raising $100B in order to produce and power AI, potentially overthrowing NVIDIA in the process.

SoftBank has stated that it intends to inject $30B into its total funding from the company’s own capital. During an annual shareholder meeting that Softbank held last week, Son confirmed that the company had set aside 4 trillion JPY on hand so far, exclusively for this project. The additional $70B is said to come from investment firms in the Middle East, supported by the fact that SoftBank has deep ties with wealth funds of Saudi Arabia and the United Arab Emirates (UAE).

The project, which is hoped to position SoftBank at the centermost of the AI sector and semiconductor industry, is codenamed Izanagi after the Japanese deity of creation. With the main problem faced by the sector being limited access to chips necessary to train AI and better the technology, SoftBank believes that building its AI chip venture will be what allows more AI-based creations to be made, hence the name choice.

The company’s ability to fulfill the industry’s computing power needs and demands is also supported by the fact that SoftBank currently commands a 90% IPO stake in UK-based semiconductor and chip design company Arm, which, as time goes by, has increasingly centered its resources toward expanding its GPU capabilities and development.

SoftBank acquired Arm for $32B back in 2016 and attempted to sell the company for $40B to NVIDIA six years later, to no avail. What seemed to be a failure at the time may have instead become a great advantage to SoftBank now, opening up the company’s chance to defeat NVIDIA at its own game.

Just as, if not more ambitious, is OpenAI, which has come to join the AI chips game under the leadership of Altman.

Several Trillions More

With the intention of not only reaching the completion of its own ambitious AI projects but boosting the world’s AI capacity as well, Altman revealed OpenAI’s plans of raising $5T to $7T to help build a new AI chip manufacturer. Altman is actively engaging with several investors, including the UAE government and Emirati Investors, to reach the company’s funding goal.

While there is no doubt that OpenAI itself requires significantly more chips than it already owns now, whether to help other companies and services that utilize the company’s GPT models or to further power and train ChatGPT, Altman believes that as GPUs are crucial and essential to the world, more needs to be made, and fast.

All these ambitious AI chip and semiconductor manufacturing plans and goals make the future of AI seem bright, and with OpenAI and SoftBank now trying to level the playing field, the race to harness AI is only just beginning.

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