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SoftBank's Arm Plans to Launch AI Chips Next Year Amid Huge Global Demand

SoftBank’s Arm Plans to Launch AI Chips Next Year Amid Huge Global Demand

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Arm, the chip designer owned by SoftBank Group, is gearing up to enter the artificial intelligence chip market with plans to launch its own AI chips by next year. The move comes amidst a heated competition in the AI chip sector, as companies race to dominate this rapidly growing market.

Setting Up an AI Chip Unit

According to a recent report by Nikkei Asia, Arm, which has a 90% stake owned by SoftBank, is in the process of establishing an AI chip unit. This unit is tasked with developing a prototype AI chip, expected to be ready by the spring of 2025. The intention is to initiate mass production by the fall of the same year.

Partnerships and Investments

SoftBank's Arm Plans to Launch AI Chips Next Year Amid Huge Global Demand

Image Source: en.amwalalghad.com

Arm is engaging in discussions with prominent contract manufacturers, including Taiwan’s TSMC, to facilitate the production of these AI chips. The initial investment for developing these chips is projected to be substantial, potentially reaching hundreds of billions of yen. However, Arm intends to absorb these development costs, highlighting the strategic importance of this venture for both Arm and SoftBank.

Strategic Moves and Future Plans

Arm’s foray into the AI chip market underscores SoftBank’s strategic focus on artificial intelligence. Masayoshi Son, the Japanese billionaire leading SoftBank, has expressed a strong commitment to AI investments. This includes a planned investment of $960 million by next year to enhance computing facilities for generative AI.

Moreover, SoftBank envisions a broader presence in the AI landscape. It aims to establish AI data centers powered by its proprietary chips across key regions like the U.S., Europe, Asia, and the Middle East by 2026. This ambitious plan signals SoftBank’s determination to be at the forefront of the AI revolution.

Also Read: Apple and OpenAI Close In on Agreement to Integrate ChatGPT into iPhones

Market Response and Financial Outlook

Arm’s announcement has already resonated positively in the market, with its shares rising by nearly 45% this year. As of current data, Arm’s market capitalization exceeds $113 billion, a testament to investor confidence in its strategic direction.

SoftBank is scheduled to report its fiscal year earnings on Monday, providing further insights into its financial health and strategic initiatives. The upcoming launch of Arm’s AI chips and SoftBank’s continued investments in AI infrastructure are poised to shape the future landscape of the tech industry, particularly in the realm of artificial intelligence.

Wayve secures $1B from SoftBank, Microsoft, and NVIDIA to build AI for self-driving cars

Wayve Secures $1Billion from SoftBank, Microsoft, and NVIDIA to Build AI for Self-Driving Cars

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In the fast-evolving landscape of autonomous driving technology, Wayve, a British unicorn, has recently made headlines by securing a monumental $1 billion investment from industry giants SoftBank, Microsoft, and NVIDIA. This substantial funding is not only a testament to Wayve’s potential but also reflects the booming growth of the UK’s self-driving vehicle and AI sectors.

UK's Booming Self-Driving Vehicle Sector

Wayve secures $1B from SoftBank, Microsoft, and NVIDIA to build AI for self-driving cars

Image Source: cie.auckland.ac.nz

Between 2018 and 2022, the UK self-driving vehicle sector saw a significant influx of £475 million in direct investment, creating 1,500 new jobs. Projections indicate that by 2035, this sector could be worth a staggering £42 billion, generating an additional 38,000 skilled jobs. Similarly, the AI sector in the UK, which currently employs over 50,000 people, is poised for exponential growth, with forecasts predicting a market value exceeding $1 trillion by 2035.

Embodied AI: Revolutionizing Autonomous Driving

Wayve’s focus on developing Embodied AI for self-driving vehicles represents a paradigm shift in autonomous driving technology. Unlike traditional systems limited by strict patterns and rules, Embodied AI empowers vehicles to learn from and interact with real-world environments dynamically. This includes navigating through unexpected scenarios such as erratic driver behavior or unpredictable pedestrian movements, enhancing safety and efficiency on the road.

Wayve's Pioneering Efforts

Founded in 2017, Wayve has been at the forefront of AV2.0 development, pioneering end-to-end AI autonomous driving systems tested on public roads. The company’s success has been bolstered by the UK’s forward-thinking regulatory frameworks, such as the Code of Practice: Automated Vehicle Trialling, fostering innovation and safety in self-driving technology.

UK's Automated Vehicles Bill: A Catalyst for Innovation

Wayve’s substantial investment aligns with the imminent passage of the UK’s Automated Vehicles Bill, designed to facilitate the safe deployment of self-driving vehicles. This comprehensive legal framework ensures rigorous safety testing for autonomous vehicles, clarifies legal liabilities, and sets the stage for a transport revolution that prioritizes safety, convenience, and accessibility.

Government and Industry Support

Leadership figures like Prime Minister Rishi Sunak and Secretary of State for Science, Innovation, and Technology, Michelle Donelan, have hailed Wayve’s achievement as a testament to the UK’s prowess in AI and innovation. This massive investment not only bolsters Wayve’s global expansion but also solidifies the UK’s position as a hub for cutting-edge AI solutions in self-driving technology.

Wayve’s groundbreaking investment underscores the immense potential of AI-driven autonomous vehicles in reshaping transportation and safety standards. With strong government support and industry collaboration, the UK is poised to lead the charge in revolutionizing the future of self-driving cars, setting new benchmarks for innovation and economic growth.

SoftBank’s Vision Fund Reports Another Loss of $1.7 Billion

SoftBank’s Vision Fund Reports Another Loss of $1.7 Billion

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SoftBank Group Corp.’s Vision Fund faced a setback as it reported a loss of $1.7 billion, attributing the decline to lower valuations at WeWork Inc. and other portfolio companies. The Vision Fund segment saw a loss of $1.7 billion through September, marking continued challenges for Masayoshi Son’s ambitious investment strategy.

SoftBank's Struggle Amidst Valuation Drops

The Vision Fund’s losses were exacerbated by declines in the value of holdings, including SenseTime Group Inc., AutoStore Holdings Ltd., and Symbotic. WeWork, a notable investment, contributed to the red ink, with cumulative losses of $14.2 billion through September, a figure that may rise further due to WeWork’s recent bankruptcy filing.

SoftBank’s Vision Fund Reports Another Loss of $1.7 Billion

Image Source: bloomberg.com

The ongoing losses raise questions about SoftBank’s assertion that the worst is behind the Vision Fund, which injected over $140 billion into numerous money-losing startups globally. Analysts express skepticism, noting the lack of visibility into the majority of the Vision Fund’s unlisted portfolio companies.

SoftBank Group, as a whole, reported a net loss of ¥931.1 billion, in stark contrast to the ¥3 trillion profit the previous year. The company is grappling with the aftermath of the Vision Fund’s $53 billion losses in the last two years. Despite challenges, Chief Financial Officer Yoshimitsu Goto emphasized positive aspects, highlighting the increased value of Arm and assets worth over $29 billion in SoftBank’s portfolio.

Goto indicated that SoftBank is in an investment phase, with a focus on autonomy in transportation and logistics. The company invested $1.5 billion in the September quarter and $1.8 billion the quarter before. Founder Masayoshi Son’s recent bets on autonomous technologies include investments in autonomous trucking startup Stack AV and an AI-driven warehousing joint venture with Symbotic Inc.

Concerns and Future Prospects

Analysts remain cautious, citing disappointing investment returns and management’s reluctance to repurchase shares. SoftBank’s strategic shift towards direct investments, bypassing the Vision Fund, adds complexity to its future endeavors. The company faces challenges in a landscape shaped by China’s tech crackdown and global economic uncertainties.

Also Read: Hyundai’s Supernal to Develop the First Flying Electric Taxi for Commercial Use in the US

SoftBank, despite the setbacks, expressed optimism about its investment in AI-related firms. The company sees potential value in assets like TikTok parent ByteDance Ltd., Fanatics Inc., and PayPay Corp. Goto highlighted the Vision Fund’s positive returns in the latest quarter, although analysts remain skeptical, questioning the absence of share buybacks.

In conclusion, SoftBank navigates a complex terrain, balancing losses from past investments with a renewed focus on emerging technologies and direct investment strategies. The company’s ability to rebound and deliver shareholder value remains uncertain amidst evolving market dynamics.

Softbank-backed Arm raises $4.87 billion at $51 per share in biggest IPO of 2023

Softbank-backed Arm raises $4.87 billion at $51 per share in biggest IPO of 2023

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Seven years after SoftBank Group Corporation, the business’s owner, purchased Arm Holdings Plc for a price of 32 billion dollars, Arm Holdings obtained a 54.5 billion dollar estimate in its United States initial public offering (IPO) on Wednesday.

The estimated value of the company has dropped from the 64 billion dollars at which SoftBank last month purchased the 25 percent share it did not yet control in the business from the one hundred billion Vision Fund it oversees.

Even with this reduced cost, SoftBank still performs far better than its forty billion-dollar agreement to hand over Arm to Nvidia Corp, which it abandoned last year due to resistance from antitrust regulators.

According to the company’s announcement on Wednesday, Arm raised 4.87 billion dollars for SoftBank through the sale of 95.5 million stocks at a cost of 51 dollars per share, which was the top of its suggested range. The announcement of Arm’s valuing decision was originally made by Reuters.

On Thursday, shares of Arm are expected to begin trading in New York.

Numerous of Arm’s top clients have already agreed to participate as cornerstone investors in the company’s first public offering, which includes Apple, Alphabet, Nvidia, Advanced Micro Devices, Intel, as well as Samsung Electronics.

In an IPO, Arm secured enough support from financiers, according to Reuters, to guarantee at least the high end of the price spectrum between $47 and $51 per share, with the chance that the sale of shares would be priced above range.

Arm started advertising its IPO this week in an effort to persuade investors that it has growth opportunities outside of the mobile phone sector, which it now holds a 99 percent share of.

Also Read: Amazon, Alphabet, Microsoft, Meta Probed by Lawmakers on Use of AI ‘Ghost’ Staff

Arm’s sales have been flat since the global economy has been slowing down due to weak smartphone demand. In comparison to the previous year’s 2.7 billion dollars in revenue, the total for the 12 months ending in March was a price of $2.68 billion.

The cloud computing marketplace, of which Arm only holds a ten percent stake and thus has further room for growth, is anticipated to increase at a yearly pace of 17 percent through 2025, in part because of developments in artificial intelligence, Arm said interested parties in New York last Thursday. It is anticipated that the automobile market, which currently controls forty-one percent of global sales, will rise by 16 percent while the mobile sector is only anticipated to grow by six percent.

SoftBank

SoftBank May Turn Profit After $48 Billion in Vision Fund Losses

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After five quarters of revenue losses, SoftBank Group Corporation’s Vision Fund is set to earn a profit owing to a recovery driven by artificial intelligence which is increasing startup market valuations.

After suffering losses of 6.9 trillion dollars approximately $48 billion over the previous two years of operation at the Vision Fund investment subsidiary, the Japanese behemoth is battling to restore its foundation.

SoftBank
Image Source: ft.com

Based on the average of expert expectations, analysts anticipate a minor gain at the investment company for the three months ending in June, whereas SoftBank is expected to disclose a profit of about 73 billion dollars on Tuesday.The IPO (Initial Public Offering) of Arm Ltd. will determine if SoftBank owner Masayoshi Son can embark on the attack and look for new possibilities in business.

In a marketplace launch as early as September, his chip creator hopes to make a profit of a maximum of ten billion dollars at an estimated valuation of 60 to 70 billion dollars. If Arm were successful in achieving its fundraising goal, it would surpass Meta Platforms Inc. as well as Alibaba Group Holding Limited as the biggest technology debut ever.

The values of Arm’s competitors have increased as a result of their obsession with artificial intelligence. The valuation of NVIDIA Corporation has surpassed a trillion dollars this year, and the Nasdaq 100, a barometer for technology firms, had its greatest January-June result ever.

Also Read: Crypto stocks dip after bitcoin slumps to six-week low.

According to Kirk Boodry, a researcher at Astris Advisory, SoftBank provides investors with a means to participate in Arm as an artificial intelligence play before its debut.

“A further run once a public prospectus comes out would not be surprising at all,” he said.

“I’m not convinced we are completely out of the woods yet,” as July’s gains may turn out to be ephemeral while “tech seems priced for perfection (again),” Boodry said. Still, the bounce is “worth highlighting,” and Arm’s upside should provide support even if the Vision Fund looks weak, he said.

Source: finance.yahoo.com

According to Boodry’s estimation, the Vision Fund’s public holdings increased by around 1.1 billion dollars in the June quarter. The two companies that contributed the most, DoorDash Inc. along with Grab Holdings Ltd., had increases of 20 per cent and 14 per cent, respectively, throughout the time frame. Coupang Inc. had a 9 per cent increase. In the same time frame, SoftBank’s stocks increased 31 per cent, which was a three-year high.

Masayoshi Son

Success Story of Softbank Founder Masayoshi Son

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Masayoshi Son is a Korean-Japanese technology billionaire, financier, and investor. Masayoshi is the founder, chairman, and CEO of the Japanese holding corporation SoftBank, the Chairman of Arm Holdings, and the CEO of SoftBank Mobile.

Masayoshi Son
Image Source: japantimes.co.jp

Son has the recognition of having suffered the worst financial loss in history (about $70 billion during the dot-com crash of 2000), but as of September 2022, he is ranked 73rd on Forbes’ ranking of The World’s Billionaires 2022.

Early Life

Masayoshi Son was born into a second-generation Zainichi Korean family in Japan.

He was intelligent and inquisitive from an early age and was intrigued by America. He visited the US at the age of 16 years old for a short study abroad program. He subsequently decided to stop going to school in Japan and spend more time in the US. He made the decision to enroll at Holy Names University after high school.

He switched to the University of California after two years and studied computer science and economics there. During this time, he realized that microchips could help him become extremely wealthy and that computer technology will soon alter the business world. He decided to come up with a minimum of one business concept each day to maintain this spirit.

He had over 250 ideas toward the year-end, some of which would later result in enormous riches. In the year 1980, he earned a BA in economics.

Success Story

After earning his degree in 1980, he founded Unison in Oakland, California, which Kyocera eventually acquired. Despite his triumphs, Son left the USA. He established Softbank in Japan in 1981 with two part-time employees and a modest office. During that time, Softbank distributed software packages to Japanese customers.

Within one year, Softbank had already begun to diversify. In 1982, the company launched two monthly magazines concerning software and PCs. By the late 1980s, Softbank had developed an incredibly well-liked system that allowed customers all throughout Japan to select phone operators that offered the most affordable rates for local and long-distance calls.

But it was Softbank’s investment in Yahoo that gave it public attention. Yahoo’s largest shareholder, Softbank, established Yahoo Japan as its Japanese affiliate.

Between 1995-1998, Son staked $374 million on Yahoo, and at its height, his investment had generated a 50-fold profit. Son had made investments in several tech firms by the late 1990s, like Kozmo.com, SportsBrain, and More.com.

The dot-com crash

Son was particularly hard-hit by the dot-com crash in 2000. 99% of the value of Softbank’s shares was lost, according to experts, making it the largest single-person wealth loss in history. Although it was a devastating blow, Son was unflappable. He made an effort to restore his empire by starting a new company that offered broadband services in Japan.

Before being able to acquire Vodafone Japan in 2006 for almost $15 billion, SoftBank tried for years to break into the burgeoning mobile industry. At the time of its takeover, Vodafone Japan was right on the edge of bankruptcy, but Son nevertheless managed to position himself as a strong player in the Japanese phone industry.

Today, his company SoftBank Mobile is the most successful telecom company in Japan. In 2013, he acquired Sprint Nextel, an American telecoms holding company, for $22 billion in 2013. Sprint is currently the fourth-largest provider of wireless networks in the USA.

He also took another action during the 2000 dot-com crash that shaped his career for the following ten years. He invested over $30 million in Alibaba, a relatively unknown Chinese company at that time.

Alibaba has since grown to be among the most valuable businesses worldwide, and Softbank’s ownership has now reached an astounding $130 billion, representing a 2240x profit on his initial investment.

With the profits from Alibaba in hand, Softbank is now stepping up its attempts to invest in companies all around the world. It has started a $100 billion Vision Fund to guide the direction of global technological advancement.

Masayoshi Son is one of the most active investors and, through his company SoftBank, has the largest investments in firms like Yahoo! and Alibaba.