SoftBank founder seeking to raise $100B for AI chip initiative to challenge Nvidia’s AI chip dominance

SoftBank founder and CEO is reportedly seeking to raise a staggering $100 billion for a new AI chip venture that could potentially challenge Nvidia’s dominance in the industry, Bloomberg reported, citing sources close to the matter.

The project, codenamed “Project Izanagi,” after a deity in Japanese mythology, seeks to establish a dedicated AI chip company that could potentially disrupt Nvidia’s dominance in the field. It plans not only to develop advanced AI processors but also to supply crucial semiconductors essential for artificial intelligence applications.

Sources familiar with the matter told Bloomberg that SoftBank intends to inject $30 billion into the project, with an additional $70 billion potentially sourced from Middle Eastern institutions. However, there has been no official confirmation from SoftBank regarding these plans at the time of reporting.

“Son envisions creating a company that can complement chip design unit Arm Holdings Plc and allow the billionaire to build an AI chip powerhouse, said the people, who requested anonymity because the discussions remain private. In one scenario being considered, SoftBank would provide $30 billion, with $70 billion possibly coming from institutions in the Middle East, one of the people said,” Bloomberg reported.

The Japanese conglomerate already owns roughly 90% ownership of the British chip designer Arm, according to data from the London Stock Exchange Group (LSEG). Earlier this month, SoftBank’s Chief Financial Officer, Yoshimitsu Goto, emphasized the increasing importance of Arm in the realm of artificial intelligence (AI). Goto has previously referred to Arm as “the core of the core” within SoftBank’s group of companies, highlighting its pivotal role in their operations.

Meanwhile, Project Izanagi aims to complement SoftBank’s existing foothold in the chip industry through its ownership of Arm Holdings, a significant player in processor architecture design. It remains uncertain whether the AI processors developed under Project Izanagi will leverage Arm’s technologies. This uncertainty could also impact Arm’s initiatives to create reference chip designs for various computing tasks. Importantly, Project Izanagi is distinct from any collaboration with OpenAI.

Masayoshi Son envisions Project Izanagi as a pivotal player in the advancement of Artificial General Intelligence (AGI), surpassing human intelligence. The project’s success hinges not only on technological advancements but also on the formidable financial backing it seeks to secure. While SoftBank has a history of bold investments, raising such an unprecedented sum in the chip industry poses significant challenges.

If successful, Project Izanagi could reshape the landscape of AI development, accelerating progress towards AGI. However, achieving this goal will require navigating numerous hurdles, including technical complexities, financial uncertainties, and formidable competition from established players like Nvidia.

Nvidia currently holds a dominant position in the market for artificial intelligence (AI) graphics cards, boasting an estimated 92% market share. The company has experienced remarkable growth, skyrocketing by 230% over the past year. However, despite its stronghold, Nvidia is now encountering potential competition from other tech giants.

In the race to secure the tools needed for the burgeoning AI chip market, major players are vying for a piece of the action. The emergence of Izanagi, backed by substantial funding, introduces yet another formidable contender into the fray. With the quest for Artificial General Intelligence (AGI) heavily reliant on scaling computing power, these new ventures could play a crucial role in averting projected chip shortages that could hinder progress.

In the broader context, SoftBank’s interest in chip technology underscores its diverse portfolio spanning telecommunications, internet services, finance, and investments in numerous startups.

Founded in 1981, SoftBank has emerged as a global powerhouse with significant stakes in companies such as Arm Holdings, Alibaba, Uber, and many others. Masayoshi Son’s latest venture, Project Izanagi, signifies the company’s relentless pursuit of innovation and its ambition to shape the future of technology.