Masayoshi Son's Plans To Rival Nvidia With SoftBank's Own AI Chip Production Hit A Roadblock As Intel Talks Reportedly Fall Through

In a recent development, SoftBank Group Corp. SFTBY has hit a snag in its plans to produce an artificial intelligence (AI) chip that could rival Nvidia Corp. NVDA. The Japanese conglomerate’s negotiations with Intel Corp. INTC have reportedly collapsed due to Intel’s failure to meet SoftBank’s production demands.

What Happened: SoftBank had been banking on Intel’s manufacturing prowess, along with the chip designs of its subsidiary, Arm, and its latest acquisition, Graphcore, to develop a competitive AI chip. However, the talks fell through ahead of Intel’s announcement of sweeping cost-cutting measures and significant layoffs in early August, Financial Times reported on Thursday.

SoftBank’s CEO, Masayoshi Son, has been strategizing to invest heavily in the AI sector, with plans encompassing chip production, software development, and data centers to house its processors. Despite the failed Intel talks, SoftBank is now turning its attention to Taiwan Semiconductor Manufacturing Co. TSM, the world’s largest contract chipmaker, blaming Intel for the breakdown of the negotiations.

SoftBank and Intel has yet to respond to Benzinga’s queries.

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Why It Matters: SoftBank’s pivot from venture capital to semiconductors and AI investments has been a significant shift in its business strategy. The company has been divesting billions of dollars from its publicly listed holdings since the end of 2021.

SoftBank’s decision to sell its Nvidia shares in 2019, which could have been worth over $150 billion, has been seen as a missed opportunity. This has been followed by the company’s acquisition of U.K.-based chipmaker Graphcore, as part of its multibillion-dollar AI push.

Despite the setback with Intel, Son remains determined to position SoftBank at the forefront of the AI revolution, pitching his plans to major tech groups like Google and Meta to secure support and funding for his new venture.

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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari