Arm, the chip designer owned by SoftBank Group, is gearing up to enter the artificial intelligence chip market with plans to launch its own AI chips by next year. The move comes amidst a heated competition in the AI chip sector, as companies race to dominate this rapidly growing market.
Setting Up an AI Chip Unit
According to a recent report by Nikkei Asia, Arm, which has a 90% stake owned by SoftBank, is in the process of establishing an AI chip unit. This unit is tasked with developing a prototype AI chip, expected to be ready by the spring of 2025. The intention is to initiate mass production by the fall of the same year.
Partnerships and Investments
Image Source: en.amwalalghad.com
Arm is engaging in discussions with prominent contract manufacturers, including Taiwan’s TSMC, to facilitate the production of these AI chips. The initial investment for developing these chips is projected to be substantial, potentially reaching hundreds of billions of yen. However, Arm intends to absorb these development costs, highlighting the strategic importance of this venture for both Arm and SoftBank.
Strategic Moves and Future Plans
Arm’s foray into the AI chip market underscores SoftBank’s strategic focus on artificial intelligence. Masayoshi Son, the Japanese billionaire leading SoftBank, has expressed a strong commitment to AI investments. This includes a planned investment of $960 million by next year to enhance computing facilities for generative AI.
Moreover, SoftBank envisions a broader presence in the AI landscape. It aims to establish AI data centers powered by its proprietary chips across key regions like the U.S., Europe, Asia, and the Middle East by 2026. This ambitious plan signals SoftBank’s determination to be at the forefront of the AI revolution.
Market Response and Financial Outlook
Arm’s announcement has already resonated positively in the market, with its shares rising by nearly 45% this year. As of current data, Arm’s market capitalization exceeds $113 billion, a testament to investor confidence in its strategic direction.
SoftBank is scheduled to report its fiscal year earnings on Monday, providing further insights into its financial health and strategic initiatives. The upcoming launch of Arm’s AI chips and SoftBank’s continued investments in AI infrastructure are poised to shape the future landscape of the tech industry, particularly in the realm of artificial intelligence.
I am a law graduate from NLU Lucknow. I have a flair for creative writing and hence in my free time work as a freelance content writer.