Arm Holdings to Venture into AI Chip Development by 2025

Arm Holdings, a subsidiary of SoftBank Group, unveils plans to enter the artificial intelligence (AI) chip market to launch its first products by 2025, as reported by Nikkei Asia.

Establishment of AI Chip Division:

The UK-based company will establish a dedicated AI chip division and target prototype development by spring 2025. Mass production is slated to commence in autumn 2025, with contract manufacturers handling manufacturing operations.

Arm Holdings will bear the initial development costs, potentially amounting to hundreds of billions of yen, with financial contributions from SoftBank Group. The partnership between Arm and SoftBank aims to accelerate the advancement of AI chip technology.

Manufacturing Partnerships:

SoftBank is reportedly in discussions with Taiwan Semiconductor Manufacturing Corp (TSMC) and other manufacturers to secure production capacity for the AI chips. Once a mass-production system is established, there are plans to potentially spin off the AI chip business under SoftBank’s umbrella.

Arm Holdings, renowned for licensing chip designs and generating revenue through royalties, is venturing into the AI chip market amidst growing demand from data center operators. 

The move reflects a broader trend in the industry, with companies seeking to develop specialized chips to power AI models and reduce reliance on established suppliers like Nvidia.

Market Performance and Expectations:

Investor confidence in Arm Holdings has surged, doubling the chipmaker’s share price since its initial public offering in September. 

The company’s market value has exceeded $100 billion, buoyed by optimism surrounding its expansion into AI computing.

SoftBank’s Financial Outlook:

While expected to report a financial loss, SoftBank Group maintains ample liquidity and stands to benefit from its significant stake in Arm Holdings. 

Investors anticipate insights into SoftBank’s growth investment strategies, considering the potential monetization of its holdings in Arm amidst the rising excitement over AI technology.