SoftBank, the Japanese conglomerate, has been in discussions with Intel, the US chipmaker, about a potential collaboration to produce artificial intelligence (AI) chips that could rival those of Nvidia. However, the talks have recently stalled due to Intel’s inability to meet SoftBank’s requirements, according to people familiar with the matter. The partnership would have combined the chip designs of SoftBank’s subsidiary, Arm, with the production expertise of its latest acquisition, Graphcore, accelerating the Japanese group’s efforts to establish itself as a major player in the booming AI industry.
Masayoshi Son, SoftBank’s chief executive, has ambitious plans to invest billions of dollars in creating a competitor to Nvidia’s market-leading AI chips, encompassing chip production, software, and even providing power for the data centres that would house the processors. The failure of the talks with Intel has prompted SoftBank to shift its focus to discussions with Taiwan Semiconductor Manufacturing Co (TSMC), the world’s largest contract chipmaker.
Had the partnership with Intel materialised, SoftBank could have potentially tapped into the Biden administration’s Chips Act funding, which aims to boost domestic semiconductor production in the United States. Sources indicate that SoftBank has blamed Intel for the collapse of the talks, claiming that the chipmaker was unable to meet its demands for volume and speed. However, they also cautioned that the talks could resume, given the limited number of chip manufacturers with the capabilities needed to produce cutting-edge AI processors.
Despite the setback, Masayoshi Son remains undeterred and has been pitching his vision to some of the world’s biggest tech groups, including Google and Meta, in an effort to garner support and financing for his latest venture. He believes that SoftBank could help counter the market power of Nvidia, whose AI data centre chips currently dominate the market. Critics have questioned whether moving Arm into chip production could jeopardise its relationship with Nvidia, a key client. However, people familiar with the plan suggest that SoftBank believes the potential rewards outweigh the risks.
Son still intends to design and produce an AI chip, with one ambitious estimate suggesting a prototype could be ready within months. The cost of Son’s latest venture could run into the tens of billions of dollars, and while he has sounded out investors from Saudi Arabia and the United Arab Emirates, no agreements have been reached thus far. The success of the project will likely hinge on SoftBank’s ability to secure production capacity, either through an agreement with TSMC or by finding another partner with the necessary chip design expertise. As the race for semiconductor supremacy continues, SoftBank’s efforts to establish itself as a major player in the AI chip market will be closely watched by industry experts and investors alike.
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