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SoftBank CEO pursues £79bn chip venture to rival NVIDIA

Written by Mon 19 Feb 2024

Image of SoftBank CEO, Masayoshi Son. Image Credit: Reuters

The CEO of SoftBank Group, Masayoshi Son, is seeking to raise up to £79.2 billion ($100 billion) for a chip venture to rival NVIDIA.

Bloomberg reported the Japanese investment company’s new project will supply semiconductors essential for artificial intelligence (AI). Sources said Son named the project after Izanagi, the Japanese god of creation and life, partly because it incorporates the initials for artificial general intelligence.

Son aims to enhance the chip design capabilities of British semiconductor firm, Arm Holding, whilst cultivating it as an AI chip powerhouse. SoftBank currently holds around 90% of Arm and acquired the semiconductor company in 2016 for £25.3 billion ($32 billion).

SoftBank may contribute £23 billion ($30 billion), while £55 billion ($70 billion) could be sourced from unnamed Middle Eastern institutions.

Reuters reported SoftBank’s Chief Financial Officer, Yoshimitsu Goto, emphasised Arm’s increasing importance in the realm of AI. He referred to the chip designer as ‘the core of the core’ within SoftBank’s group of companies.

Last week, shares of Arm rose 40% fuelled by AI optimism. Stock in Arm Holdings surged 21% to £110.85 ($139.65), hitting a high of £130.18 ($164), 42% above Friday’s close. 

Since the semiconductor firm exceeded Wall Street’s quarterly outlook predictions, shares in the company have risen 80%. Arm’s market value has surged to £111 billion ($141 billion), almost tripling since its September IPO. 

In August, Arm applied for a listing on the NASDAQ stock exchange in what was thought to become one of the biggest IPOs of the year. While the filing did not list a price, an internal transaction by SoftBank valued Arm at £50.6 billion ($64 billion).

Arm said it anticipates a 6.8% annual chip market growth until 2025. Due to the growing complexity of semiconductors needed for smartphones and AI algorithms, the company is expected to contribute more towards the value of each chip.

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Written by Mon 19 Feb 2024

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