SoftBank Explores Major AI Investments After Arm’s Lucrative IPO
Among SoftBank's options is the potential investment in OpenAI, a prominent AI research lab with the backing of Microsoft.

SoftBank is on the hunt for deals in artificial intelligence, including a potential investment in OpenAI, after the blockbuster listing of UK chip designer Arm bolstered Masayoshi Son’s multibillion-dollar war chest.  With a war chest bolstered by Arm’s blockbuster listing, SoftBank is considering pouring tens of billions of dollars into AI-related ventures.

Among SoftBank’s options is the potential investment in OpenAI, a prominent AI research lab with the backing of Microsoft. OpenAI is renowned for its role in developing cutting-edge AI models like ChatGPT. SoftBank is also exploring the possibility of forging a broad strategic partnership with OpenAI.

In addition to OpenAI, SoftBank is examining various alternatives within the AI landscape. This includes the potential for substantial investments in competitors of ChatGPT maker, OpenAI. Furthermore, SoftBank has initiated preliminary discussions regarding the acquisition of Graphcore, a UK-based AI chip manufacturer.

When approached for comments on these developments, SoftBank said: “We do not comment on rumours.”. OpenAI chose not to comment on the matter, while Graphcore explicitly denied receiving any acquisition offer from SoftBank. Analysts say Arm’s IPO on Thursday, which raised almost $5bn in proceeds, will expand SoftBank’s war chest to as much as $65bn, including its own cash as well as using its remaining 90 per cent holding in Arm as collateral for loans

Masayoshi Son, who revealed in June that he is a “heavy user” of ChatGPT, has cultivated a close relationship with OpenAI’s CEO, Sam Altman. Son has gone as far as describing Altman as “one of the key people on Earth” and claimed to engage in daily conversations with him.

Notably, SoftBank’s mobile unit has already established a business partnership with OpenAI to provide generative AI technology, such as chatbots, to Japanese companies. This service is built on Microsoft’s Azure computing platform, which serves as OpenAI’s exclusive cloud provider. Earlier this year, Microsoft committed a substantial $10 billion investment in OpenAI through a multiyear deal.

SoftBank’s aspirations extend beyond individual investments in AI. The company’s subsidiary has expressed the intent to develop a Japanese equivalent of ChatGPT. Masayoshi Son’s renewed enthusiasm for dealmaking signifies a shift in strategy. After a period of what he termed “defensive mode” during the pandemic and the tech downturn in 2022, SoftBank is now returning to “offence mode.” This strategic pivot involves actively pursuing new deals and ventures.

Masayoshi Son’s ambitions for SoftBank encompass establishing the Japanese technology conglomerate as a formidable competitor in the AI sector, including AI chip development. As things stand, Nvidia has emerged as a dominant player in the AI chip market, achieving a market value exceeding $1 trillion this year. Notably, SoftBank had previously held a stake in Nvidia in 2017 but divested its shares in 2019.

During Arm’s IPO roadshow, the company underscored the increasing importance of AI in its growth strategy. Arm seeks to diversify beyond its core smartphone market and expand its presence in cloud computing. However, analysts point out that Arm’s contribution to large language models, such as ChatGPT, is relatively modest compared to other facets of AI technology.

In conclusion, SoftBank’s strategic pursuit of substantial AI investments, buoyed by the success of Arm’s IPO, signals the conglomerate’s commitment to shaping the future of artificial intelligence. Whether through potential collaborations with OpenAI, investments in competitors, or exploring AI chip development, SoftBank is poised to play a pivotal role in the advancement of AI technology. Masayoshi Son’s shift to “offence mode” underscores a renewed dedication to dealmaking and innovation, positioning SoftBank as a prominent force in the ever-evolving AI landscape.