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SoftBank's Izanagi: A $100B AI Chip Venture

  • SoftBank founder Masayoshi Son aims to raise $100 billion for a new AI venture, Izanagi, in collaboration with Arm, a chip design company owned by SoftBank.
  • SoftBank plans to tap into Middle East-based investors for $70 billion, with an additional $30 billion from the company itself to fund the AI project.
  • SoftBank achieved its first quarterly profit for the period ending December 31, 2023, following losses, marking a positive turn in its financial performance.

SoftBank Group's founder, Masayoshi Son, is seeking to raise $100 billion for a new venture in the Artificial Intelligence industry. The venture, codenamed Izanagi, would collaborate with Arm, a chip design company that SoftBank owns a majority stake in. 

To fund this project, SoftBank plans to tap into Middle East-based institutional investors for $70 billion, while contributing $30 billion itself. Nvidia currently dominates the AI chip market, but there is room for competition as the demand for AI processors continues to grow.

This new chip project aligns with SoftBank's focus on AI, as they have been gradually selling off parts of their stake in Alibaba to reinvest in AI since 2023. This move into AI was both offensive and defensive for SoftBank, following a significant loss in their Vision Fund. 

Arm, in which SoftBank holds a 90% stake, has also experienced a surge in shares due to the increasing demand for AI chips. Goto, SoftBank's CFO, believes that Arm will soon be essential to AI.

Arm, which was purchased by SoftBank in 2016 for $32 billion, went public on Nasdaq in September 2023. The initial public offering (IPO) valued the British chip design company at $54.5 billion. 

Arm's clientele includes Nvidia, as well as smartphone manufacturers and chip designers like Apple, Google, Microsoft, and Amazon. SoftBank, after experiencing four consecutive losses, achieved its first quarterly profit for the period ending on December 31, 2023. 


Edited by Shruti Thapa

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