SoftBank Fund: Everything you need to know about Masayoshi Son’s new $100 billion AI venture ‘Izanagi’

SoftBank Group Corp. founder Masayoshi Son is reportedly aiming to secure up to $100 billion for a new artificial intelligence (AI) chip venture codenamed “Izanagi,” Bloomberg reports. ing.

The effort is aimed at competing with Nvidia Corporation, the current leader in the AI ​​chip space. Bloomberg, citing sources, said the company is contributing to the production of semiconductors essential for AI applications.

Representatives for SoftBank and Arm declined to comment on the matter.

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Izanagi: Aiming to build an AI chip powerhouse

The project, known as Izanagi, marks Son’s full-fledged entry into the AI ​​field at a time when SoftBank is scaling back investments in startups. According to the report, Son envisions establishing a company to complement chip design arm Arm Holdings in order to build a robust AI chip powerhouse.

Japanese conglomerate SoftBank owns about 90% of British chip design company Arm, according to London Stock Exchange Group (LSEG).

Izanagi’s potential $100 billion funding structure includes $30 billion from SoftBank, with another $70 billion potentially coming from Middle Eastern institutions, sources told the magazine. Told.

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What success means: Big AI investments

If successful, the Izanagi chip project could become one of the largest investments in AI since the advent of ChatGPT, surpassing Microsoft Corporation’s recent $10 billion investment in OpenAI.

My son chose the name Izanagi, after the Japanese god of creation and life, incorporating the initials for artificial general intelligence (AGI).

Details regarding how the project will be financed and where allocated funds will be directed remain unresolved, and the project could evolve further. Son, known for exploring various investment ideas, is focused on strengthening Arm’s presence in the AI ​​market and exploring the potential of next-generation chips, the report said.

SoftBank, known for investing heavily in technology, has a history of making big bets on startups. Despite facing the challenge of plunging valuations due to the pandemic, SoftBank has adopted a defensive strategy to survive a period of rising interest rates when investors’ risk appetite has declined.

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What is noteworthy is that SoftBank recently returned to profitability for the first time in five quarters, benefiting from improved performance at portfolio companies.

Son is now pivoting his efforts to Arm, seeing an opportunity to build a significant company similar to the Magnificent Seven stock. SoftBank, which had 6.2 trillion yen ($41 billion) in cash and equivalents as of Dec. 31, is well-positioned for this business thanks to the recovery in global stock markets.

Collaboration and the role of Arm

There have been discussions with OpenAI’s Sam Altman about semiconductor manufacturing, but Izanagi’s ambitions differ from Altman’s. Son personally led the project and asked leaders from other AI companies to join, but they declined.

Arm CEO Rene Haas is advising Son on the project as a member of SoftBank’s board of directors, and has highlighted the potential for AI-related investments using Arm’s chip design.

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SoftBank Chief Financial Officer Yoshimitsu Goto said in February 2024 that Arm will be critical to AI, calling the chip designer “the core of the core” within SoftBank Group. Arm executives reported earlier this month that there was strong demand for the company’s central processing units, especially in combination with Nvidia chips for AI tasks in data centers.

Son’s unwavering enthusiasm for AGI guides Project Izanagi, and despite past pivots, Son remains confident that AGI will become a reality within the next 10 years, the report added. Ta.

In October, he told a large group of Japanese business customers that if they don’t implement AI, they will be left behind. “AGI is what every AI professional wants. But when you ask about detailed definitions, numbers, timing, computing power, and how smarter AGI is than human intelligence, most people don’t know the answer. “No. I have my own answer. I believe AGI will be a reality within 10 years,” he said.

(Information provided by Bloomberg and Reuters)