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SoftBank has abandoned its plans to collaborate with Intel to produce an artificial intelligence (AI) chip aimed at competing with industry leader Nvidia.
The Financial Times reported this development on Thursday, citing sources familiar with the matter.
SoftBank and Intel’s Partnership Breakdown
The partnership between Japanese technology investment giant SoftBank and Intel reportedly fell through due to the U.S. chipmaker’s struggles to meet SoftBank’s specific requirements.
According to the sources, SoftBank blames Intel for failing to deliver the required volume and speed, leading to the breakdown of the deal.
This collapse preceded Intel’s recent cost-cutting measures, including significant layoffs in early August, suggesting a tumultuous period for the company.
SOFTBANK'S AI CHIP PLANS WITH INTEL STALL
SoftBank held talks with $INTC about producing an AI chip to compete with $NVDA, but the deal fell through as Intel couldn't meet SoftBank’s demands.
SoftBank is now focusing on TSMC for production. Despite the setback, SoftBank's CEO,…
— Wall St Engine (@wallstengine) August 15, 2024
This timing suggests that the partnership’s failure was not directly related to Intel’s restructuring efforts.
However, SoftBank is reportedly focusing on discussions with Taiwan Semiconductor Manufacturing Co (TSMC), the world’s largest contract chipmaker.
This pivot indicates SoftBank’s continued commitment to developing advanced AI chips despite the setback with Intel. SoftBank appears more determined than ever to drive AI innovation.
Founded and led by Japanese billionaire Masayoshi Son, SoftBank reportedly plans to invest $960 million by next year to upgrade its computing facilities for generative AI.
Last year, Son expressed SoftBank’s ambitions in AI, stating: “We want to be [in] the leading position for the AI revolution.”
SoftBank’s AI Aspirations and Arm’s Breakthrough Chip Technology
Looking ahead, SoftBank has set its sights on building AI data centers powered by homegrown chips.
These facilities will span the U.S., Europe, Asia, and the Middle East, with a target launch as soon as 2026.
In a significant development, SoftBank Group subsidiary Arm announced plans to launch its own AI chips by next year.
Arm, a UK-based chip designer owned by SoftBank, plans to create a dedicated AI chip unit, aiming to develop a prototype by spring 2025.
SoftBank's $ARM plans to launch AI chips in 2025 (Nikkei Asia).
Arm, based in the U.K., will set up an AI chip division, aiming to build a prototype by spring 2025. Mass production, to be handled by contract manufacturers, is expected to start in the fall of that year. https://t.co/iYPriikqxx pic.twitter.com/tbCaJWD2dh
— QF Research (@ResearchQf) May 11, 2024
The company is already discussing with contract manufacturers, including TSMC, to produce these AI chips, with mass production slated to begin in fall 2025.
Arm is behind the designs of the fundamental architecture upon which many chips are built, selling licenses for its designs to major players like Qualcomm and Nvidia.
