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SoftBank (OTCPK:SFTBY) founder and Chief Executive Officer Masayoshi Son is looking for investors to help with a $100B plan to boost the global supply of artificial intelligence-focused processors in an effort to better compete with Nvidia (NASDAQ:NVDA), Bloomberg reported.
The project, codenamed Izanagi after the Japanese god of creation and life, could see SoftBank invest $30B of its own money and the remaining $70B from outside partners, including those in the Middle East in one scenario, the news outlet added, citing people with knowledge of the matter.
The news comes as Nvidia, which is slated to report fiscal fourth-quarter results on Feb. 21, continues to dominate the market for AI accelerators. Nvidia had 92% of the data center GPU market as of December 2023, according to IOT Analytics, while others like AMD (AMD) and Intel (INTC) account for the remaining 8%.
Arm’s length
SoftBank’s Son is contemplating the project as being able to complement Arm Holdings (NASDAQ:ARM), its majority owned British chip design unit which it partially spun off to investors last year, the people said. Arm Chief Executive Rene Haas, who is also a SoftBank board member, is said to be advising Son on the project.
SoftBank, Arm and Nvidia did not immediately respond to a request for comment from Seeking Alpha.
Over the past month, Arm shares have soared 95% on back of better-than-expected earnings and guidance, benefiting SoftBank and its balance sheet in the process.
Arm was downgraded by investment firm Daiwa Securities on Friday following the recent surge in the stock. Arm shares fell 5% while Nvidia rose 1.9% in late afternoon trading.
Son’s big bets
Son’s Project Izanagi efforts to create an Nvidia rival are said to be separate from his plans to work with OpenAI Chief Executive Sam Altman to raise between $5T and $7T to boost the world’s chip-making capacity and its ability to power AI.
Son is known to make extraordinary bets and calls, including SoftBank’s $100B Vision Fund, which became the largest ever technology venture capital fund. In 2022, it lost a record $23.4B on failed bets in several of its investments, including WeWork (OTC:WEWKQ). (In its most recent quarter, the Vision Fund generated a $4B gain, amid a sharp rebound in the valuations of technology stocks in recent months.)
“It is wrong to say that AI cannot be smarter than humans as it is created by humans,” Son said at the company’s World conference in October, adding that he believed general artificial intelligence, sometimes referred to as artificial general intelligence, would top the collective intelligence of humanity and come within the next 10 years.
“AI is now self learning, self training, and self inferencing, just like human beings.”