SoftBank Invests Nearly a Billion into Arm AI Chip Project

On Friday, SoftBank announced an injection of $960.00 million to help Arm build an artificial intelligence (AI) chip prototype by spring 2025.

The Japanese multinational investment holding firm plans to develop the production process with contract manufacturers, including Taiwan’s TSMC. SoftBank, which has a 90.00% stake in Arm, expects the subsidiary to begin mass-producing AI chips by fall 2025.

Founder and CEO Masayoshi Son emphasized that the Tokyo-headquartered company aims to take the leading position in the AI revolution. As a result, it plans to invest heavily in expanding its generative AI (GenAI) computing facilities throughout next year.

Furthermore, the parent company declared it will bear the initial development costs of the first batch of Arm AI chips. Hence, it will pump hundreds of billions of yen to accelerate its subsidiary’s AI chip development by over a year.

Insiders revealed that once mass production stabilizes, the AI chip segment may be spun into a separate entity. Afterward, the holdings company will acquire the chipmaker, allowing Arm to return to focusing on building next-generation AI chip architecture.

SoftBank acquired Arm for $32.00 billion in 2016, approximately seven years before it was listed on the Nasdaq. As of Q1, the subsidiary has an estimated market capitalization of $113.00 billion and boasts a 45.00% year-to-date growth rate.

Arm to Support SoftBank in the AI Arms Race

According to market analysts, SoftBank will instantly become a major player in GenAI once Arm begins manufacturing its own AI chips. Presently, the UK-based tech firm designs fundamental chipmaking architecture and sells licenses to chip builders, including Nvidia and Qualcomm.

Most of the British firm’s revenue comes from royalty fees on each unit built upon its patented design. Last year, it claimed that 99.00% of high-end smartphones use Arm technology in their central processing systems.

Tech specialists laud the Softbank subsidiary for its unique competitive advantage in creating an AI chip that maximizes Arm architecture. Moreover, having its own chip to test its upcoming designs may accelerate the advancement of Arm’s primary business segment.

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