In the wake of the successful initial public offering (IPO) of Arm Holdings, SoftBank Group, the Japanese conglomerate led by visionary entrepreneur Masayoshi Son, is setting its sights on ambitious artificial intelligence (AI) investments. SoftBank, known for its diverse portfolio and groundbreaking ventures, is reportedly seeking to allocate tens of billions of dollars to the AI sector. Among its potential partners is OpenAI, the creator of ChatGPT, and various generative AI software makers, as reported by the Financial Times.
A post-arm IPO AI ambition
The blockbuster listing of UK chip designer Arm Holdings, which raised nearly $5 billion in proceeds, has significantly bolstered SoftBank’s financial reserves. With the potential to amass up to $65 billion, including its cash and collateralized loans backed by its 90% stake in Arm, SoftBank is poised to impact the AI landscape substantially.
OpenAI emerges as a key player
Microsoft-backed OpenAI has emerged as a frontrunner in SoftBank’s AI investment strategy. The Japanese conglomerate is actively exploring options to collaborate with OpenAI, possibly even striking a broad strategic partnership with the renowned AI organization. Masayoshi Son, SoftBank’s CEO, shares a close relationship with OpenAI’s CEO, Sam Altman, whom he has praised as “one of the key people on Earth,” with frequent conversations between the two leaders.
The SoftBank-OpenAI connection
SoftBank’s mobile unit has partnered with OpenAI to deliver generative AI technology, such as chatbots, to Japanese companies. This service is built upon Microsoft’s Azure computing platform, OpenAI’s exclusive cloud provider. Earlier this year, Microsoft invested $10 billion in OpenAI, cementing its commitment to advancing AI technologies.
Japanese ambitions in AI
SoftBank’s mobile subsidiary is also pursuing the development of a Japanese counterpart to ChatGPT. With Masayoshi Son’s renewed enthusiasm for dealmaking, SoftBank is poised to become a formidable player in the AI sector, including developing cutting-edge chips that power AI technology.
Nvidia’s dominance in AI chips
The current AI chip market is largely dominated by Nvidia, a Silicon Valley-based company whose market value has soared to over $1 trillion this year. SoftBank had previously invested in Nvidia in 2017 but divested its stake in 2019. This history with Nvidia underscores SoftBank’s determination to carve a significant niche in the AI chip market.
Arm’s Role in AI
During Arm Holdings’ recent IPO roadshow, the company emphasized its commitment to AI, signaling its intention to diversify beyond its core smartphone market and expand into cloud computing. However, analysts have noted that Arm plays a relatively smaller role in developing large language models, the technology that powers ChatGPT, than Nvidia.
SoftBank’s resurgence from defense to offense.
Masayoshi Son’s enthusiasm for dealmaking has experienced a resurgence in recent months, marking a shift from what he referred to as a “defensive mode” during the pandemic and the tech downturn in 2022. During this period, SoftBank focused on bolstering its cash position and preparing for Arm’s IPO. With the successful listing behind them, SoftBank is ready to resume dealmaking with renewed vigor.
A vision for SoftBank’s AI future
Masayoshi Son’s vision extends beyond mere investments; he aims to position SoftBank as a formidable competitor in the AI arena, particularly in developing AI chips. As the AI revolution reshapes industries, SoftBank’s strategic moves in this space will be closely watched by investors and technology enthusiasts.
SoftBank’s post-Arm IPO ambitions in artificial intelligence have the potential to redefine the landscape of AI technology. With OpenAI and other generative AI software makers on its radar, SoftBank aims to leverage its substantial financial resources to shape the future of AI and establish itself as a key player in this rapidly evolving domain.
