SoftBank, a global telecommunications and technology conglomerate, is preparing to enter the lucrative artificial intelligence (AI) market. The company’s subsidiary, Arm, is planning to launch an AI chip unit with a prototype set for spring 2025 and mass production to follow in the fall of that year. This move is part of SoftBank CEO Masayoshi Son’s $64 billion investment to position Arm in the growing AI market and expand its presence in data centers, robots, and power generation.
Arm, known for its technology in smartphones and PCs, has already begun to benefit from the growing interest in AI. The company saw increased revenues in the last quarter of 2023 due to long-term license agreements with leading technology companies using its most advanced CPUs for AI-related products. In the first quarter of 2024, Arm reported its second consecutive profitable quarter, with a net income of 328.9 billion yen ($2.11 billion) from January to March.
SoftBank is currently discussing production capacity for the new AI chips with Taiwan Semiconductor Manufacturing Corp. (TSMC) and other manufacturers. Once production is in full swing, Arm’s AI chip business may become a direct subsidiary of SoftBank. This move would position Arm in direct competition with industry leaders like Nvidia, who currently dominate the AI chip market. However, SoftBank’s investment could help Arm gain market share and establish itself as a major player in the industry.
The global AI chip market was valued at $14.9 billion in 2022 and is expected to grow to $383.7 billion by 2032, according to Allied Market Research. Companies like Microsoft and Amazon are driving this growth as they require more advanced chips for their AI data centers. Arm’s stock has increased by nearly 58% this year, with a market capitalization now exceeding $113 billion.
In conclusion, SoftBank Group’s arm subsidiary is preparing to enter the lucrative artificial intelligence market by launching an AI chip unit set for spring 2025 mass production following it after spring 2025 . This move aligns with CEO Masayoshi Son’s strategy of expanding their presence in data centers, robots and power generation through investing $64 billion positioning arm as major player
