Arm, a subsidiary of Tokyo-based SoftBank Group (NASDAQ: SFTBY), is set to expand its offerings to include the development of artificial intelligence (AI) chips, putting it in direct competition with industry heavyweights.
Nikkei Asia reported that Arm’s ambitious plan to develop AI chips will see the company establish a dedicated semiconductor unit to spearhead the company’s goals. The unit, comprising AI experts from a global talent pool, will be charged to roll out a prototype by mid-2025.
Launching a prototype will not be easy, but Arm has several factors in its favor at play. Firstly, the company is no stranger to semiconductors, given its extensive experience in circuit designs for Nvidia and other leading chip manufacturers, in addition to its impressive share of the smartphone processor space.
Another factor in play is its parent company’s desire to triple the size of its AI bets across the board with a sizable investment. Softbank is willing to invest up to JPY 10 trillion ($64 billion) to transform the Group into a leading player in the AI space.
Softbank says it will fund 90% of Arm’s foray into the chip development space, a move that could cost the company a small fortune. Softbank is already in talks with contract chip makers to mass produce Arm’s prototype, with Intel (NASDAQ: INTC), Samsung Foundry, and Taiwan Semiconductor Manufacturing Company (TSMC) topping the list.
It appears that Arm’s incoming chips may not be commercially available, with the report claiming that the chips will be used for Softbank’s data centers. The new data centers in the EU, U.S., Asia, and the Middle East are expected to go live before the end of 2026, but energy consumption may put a dent in the company’s plans.
As a way around the debacle, Softbank will earmark a significant portion of its budget on investing in renewable energy sources, including wind and solar farms.
Softbank is also keen on pursuing high-profile partnerships to advance its causes while being open to investments from various institutional investors. The Group has previously dabbled with blockchain technology after it trialed a mobile payments service using the technology for its underlying architecture.
AI chips record high activity
The market for AI chips has been buzzing with activity since OpenAI launched ChatGPT, with several chipmakers rolling out tailor-made offerings to power large language models (LLM).
Presently, the sector is valued at $30 billion, but new entrants in the space could see the valuation rise to $100 billion before the end of the decade.
Nvidia (NASDAQ: NVDA) currently leads the pack, but experts have expressed skepticism over its capability to meet soaring industry demand, with Microsoft (NASDAQ: MSFT), AMD (NASDAQ: AMD), and Apple (NASDAQ: AAPL) throwing their hats in the ring.
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Source: https://coingeek.com/softbank-arm-new-ai-chips-ready-by-2025-aims-to-become-an-ai-powerhouse/