SoftBank stock rises on CEO Masayoshi Son’s plan for $100 billion chip project

Shares in the Tokyo-based tech investor gained as much as 3.2 percent after Bloomberg News reported the 66-year-old billionaire is seeking funding for a foray into AI chips to compete with Nvidia Corp. The project, code-named Izanagi, would be aimed at building an AI chip venture that would complement Arm Holdings Plc, the chip design company in which SoftBank holds a majority stake.

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In one scenario Son is considering, SoftBank would provide $30 billion, with $70 billion possibly coming from institutions in the Middle East, one of the people said.

If he succeeds, the chip project would dwarf not just Microsoft Corp.’s bet on OpenAI but would comprise roughly a fifth of the global semiconductor market. Named after the Japanese god of creation and life, the project reflects Son’s unfettered enthusiasm for the coming of artificial general intelligence. He often said a world filled with machines that are smarter than humans would be happier. 

SoftBank Stock Movement

After a series of setbacks in his start-up investments, the Japanese entrepreneur has seen Arm blossom into a solid success. SoftBank shares have gained about 30% in the last 10 trading days, with a surge in Arm’s shares of more than 80%.

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In AI, Son now sees an opportunity to create a company rivalling the Magnificent Seven stocks, the people said.

SoftBank had ¥6.2 trillion ($41 billion) in cash and cash equivalents as of Dec. 31, thanks to a rebound in global equity markets. Its balance sheet got a boost from a windfall in T-Mobile US Inc. shares, worth almost $8 billion, as well as from the company’s 90% stake in Arm.

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This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

Published: 19 Feb 2024, 07:18 AM IST