SoftBank's AI Chip Ambitions: Talks with Intel Fall Through

Report: SoftBank held talks with Intel about developing an AI chip - SiliconANGLE

Report: SoftBank held talks with Intel about developing an AI chip SoftBank Group Corp. and Intel Corp. held talks in recent months about developing an artificial intelligence chip, the Financial Times reported today. The negotiations, which have since fallen apart, are believed to have been part of a multibillion push on SoftBank's part to challenge Nvidia Corp. in the AI accelerator market. The Tokyo-based conglomerate reportedly hopes to not only build AI chips but also develop the software that will power them. Furthermore, it intends to play a role in supplying electricity to customers' data centers. SoftBank is the majority stakeholder in Arm Holdings plc, the world's top provider of central processing unit designs. Arm's latest CPU blueprint includes optimizations that allow it to run AI models significantly faster than earlier silicon. However, the company has not yet produced a dedicated AI processor with compatible capabilities to Nvidia's graphics processing units. Last July, SoftBank expanded its presence in the chip market by acquiring venture-backed semiconductor startup Graphcore Ltd. The latter company developed an AI chip called the IPU Bow that it positioned as a direct alternative to Nvidia GPUs. According to the Financial Times, SoftBank's plan to enter the AI accelerator market involves combining Arm processor designs with Graphcore's expertise in "bringing a chip into production." SoftBank had reportedly considered partnering with Intel to manufacture its AI chips. The negotiations are believed to have failed because the chipmaker couldn't meet the project's "volume and speed" requirements. It's unclear whether speed refers to chip performance or the amount of time it would have taken Intel to bring the first SoftBank-developed processor to market. SoftBank has also held talks with Taiwan Semiconductor Manufacturing Co. about making its chips. However, the companies have reportedly not yet inked a supply agreement in a delay that may be connected to the limited capacity at TMSC's fabs. The Financial Times' sources said that SoftBank could restart the discussions with Intel if it struggles to find another manufacturing partner. The Graphcore acquisition bought SoftBank a chip technology called wafer-on-wafer stacking. It provides the ability to place a silicon module with power management components directly atop an AI processor. Using electricity stored in the power management module, the processor can run at faster frequencies than would otherwise be possible. SoftBank may seek to use the technology to give its planned chips an edge over Nvidia's graphics cards. Today's report indicates that the first prototype of the company's AI processor may be ready in a matter of months. The development effort could be led by the AI chip design business that Arm is rumored to be setting up. In May, Nikkei Asia reported that the unit was expected to build a prototype machine learning accelerator by spring 2025. At the time, executives were reportedly weighing spinning off the AI chip design business to move it under the SoftBank corporate umbrella. The chips that the company plans to develop would compete with not only Nvidia graphics cards but also Intel's growing lineup of machine learning accelerators. The latest addition to the lineup debuted earlier this year in the form of a processor called the Gaudi 3. The chip, which is geared towards data centers, features two core clusters that are each optimized for a different set of machine learning workloads. Next year, Intel plans to launch a more advanced AI processor codenamed Falcon Shores. The chip was originally set to combine a GPU and CPU circuits in a single package, but it's believed that the company may have since revised the design. Falcon Shores is expected to consume 1,500 watts of power, significantly more than Nvidia's fastest data center chips.

SoftBank, Intel talks to produce AI chip to rival Nvidia reportedly failed

This plan was aimed at ramping up SoftBank's (OTCPK:SFTBY) efforts to combine the chip designs of its top bet Arm Holdings (ARM) with the production expertise of its latest acquisition, British AI chipmaker Graphcore. However, discussions collapsed as SoftBank (OTCPK:SFTBY) believed Intel (INTC) could not meet its demands for volume and speed. This happened before the chip giant announced drastic cost cuts. But sources said talks may restart as only a few chipmakers have the capabilities to manufacture cutting-edge AI processors. SoftBank (OTCPK:SFTBY) is now said to be focused on talks with Taiwan Semiconductor Manufacturing (TSM), the world's largest contract chipmaker. But a deal has not been reached, as TSM is reportedly struggling to meet demand from existing customers. Intel (INTC) and SoftBank (OTCPK:SFTBY) declined to comment on the report. SoftBank (OTCPK:SFTBY) CEO Masayoshi Son, who plans to spend billions of dollars to ensure the Japanese group keeps up in the AI race, still intends to go ahead with his plan to produce an AI chip. However, production capacity remains a major hurdle.

SoftBank discussed AI chips tie-up with Intel to rival Nvidia

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter. SoftBank held talks with Intel about producing an artificial intelligence chip to compete with Nvidia but the plan foundered after the US chipmaker struggled to meet the Japanese group's requirements. Negotiations to partner with Intel, which have not previously been reported, would have accelerated SoftBank's efforts to combine the chip designs of its crown jewel Arm with the production expertise of its latest acquisition, Graphcore, to create a rival to Nvidia's market-leading AI chips, said people familiar with the matter. SoftBank chief executive Masayoshi Son plans to invest billions of dollars in an attempt to put the Japanese group at the centre of the AI boom. His ambitious scheme, which he has pitched to Big Tech companies, encompasses chip production and software through to providing power for the data centres that would house its processors. The talks with Intel failed in recent months, in advance of the US chipmaker's announcement of drastic cost-cutting plans, including thousands of lay-offs, in early August, these people said. SoftBank is now focusing on discussions with Taiwan Semiconductor Manufacturing Co, the world's largest contract chipmaker. Using Intel's US foundry to manufacture AI chips could have allowed SoftBank to tap into the Biden administration's Chips Act funding to boost domestic semiconductor production. Intel chief executive Pat Gelsinger is attempting to put the Silicon Valley company back on the leading edge of global chipmaking. After receiving almost $20bn in funding and loans from the US government in March, Intel is investing heavily in an attempt to catch up to rivals TSMC and Samsung in chip manufacturing and land major new customers for the company's foundry business. SoftBank has blamed Intel for the collapse of the talks, these people said, claiming the chipmaker was incapable of meeting its demands for volume and speed. They also cautioned the talks could start again given the limited number of chip manufacturers with the capabilities needed to produce cutting-edge AI processors. Intel declined to comment on "discussions we may or may not have with customers". SoftBank and Arm declined to comment. Undeterred by the uncertainties surrounding his production plans, Son has pitched some of the world's biggest tech groups, including Google and Meta, as he tries to drum up support and financing for his latest venture. Some of the vast investment needed to build a new chip production business could be funded by advance orders from deep-pocketed Big Tech companies, said people familiar with his thinking. Meta declined to comment. Google did not respond to a request for comment. One element of Son's pitch is that SoftBank could help counter the market power of Nvidia, which briefly became the world's most valuable company earlier this year. Nvidia's AI data centre chips are by far the most popular on the market, with its broad software platform, Cuda, underpinning its dominance. Critics of Son's plan have questioned whether moving Arm into chip production could damage its relationship with Nvidia, a key client, but the people familiar with the plan say SoftBank believes the risk is worth the reward. Son, said the same people, still intends to design and produce an AI chip, with one ambitious estimate suggesting a prototype could be ready in a matter of months. His recent purchase of struggling UK AI chipmaker Graphcore was driven by its expertise in bringing a chip into production, they added. However, chip production capacity remains a significant hurdle. The SoftBank boss has held talks with TSMC but has not reached an agreement, as the Taiwan-based chipmaker is struggling to meet demand from existing customers, including Nvidia, the people said. TSMC declined to comment. One of the people familiar with the still-evolving plan suggested that if an agreement with TSMC can be reached, Son could need another partner to provide the expertise in chip design that Intel had offered. The cost of Son's latest venture could run into the tens of billions of dollars but people close to SoftBank cautioned that putting a figure on the total investment needed is not realistic at this stage. The chief executive has sounded out Saudi Arabian and United Arab Emirates investors about the plan but nothing has been agreed, they said. Intel, which had been a cornerstone investor in Arm's initial public offering last September, disclosed this week that it sold its entire stake in the UK chip designer during the second quarter of this year, raising about $150mn. The company recently suspended its dividend as it tries to conserve cash. In April, Intel revealed a $7bn operating loss for its manufacturing business, causing shares to plunge. Reports of a design flaw in its PC chips followed. Then, during its latest results announcement earlier this month, it launched a plan to cut about 15 per cent of its workforce, amid declining revenue. Its shares shed a quarter of their value in a day, leaving its market capitalisation languishing below $100bn.

Masayoshi Son's Plans To Rival Nvidia With SoftBank's Own AI Chip Production Hit A Roadblock As Intel Talks Reportedly Fall Through - NVIDIA (NASDAQ:NVDA), Intel (NASDAQ:INTC)

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. See Also: Trump Left Shocked By Power-Hungry AI, Tells Elon Musk: 'Requires Twice The Energy That The Country Already Produces' 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. Read Next: 'Made By Google' Event Marred By Absence Of 'Demo Spirits' -- Gemini Fails Twice During Live Session: Pixel 9 Launch Details Here Image via Shutterstock This story was generated using Benzinga Neuro and edited by Pooja Rajkumari Market News and Data brought to you by Benzinga APIs

SoftBank scraps AI chips tie-up plan with Intel: report

SoftBank has blamed Intel for the collapse of the talks, claiming Intel was incapable of meeting its demands for volume and speed, the report said, adding that SoftBank is now focusing on discussions with Taiwan Semiconductor Manufacturing Co (TSMC), the world's largest contract chipmaker.Japanese technology investor SoftBank dropped plans of producing an artificial intelligence chip with Intel to compete with Nvidia, the Financial Times reported on Thursday. The partnership did not materialize after the U.S. chipmaker struggled to meet SoftBank's requirements, according to the report, citing people familiar with the matter. SoftBank has blamed Intel for the collapse of the talks, claiming Intel was incapable of meeting its demands for volume and speed, the report said, adding that SoftBank is now focusing on discussions with Taiwan Semiconductor Manufacturing Co (TSMC), the world's largest contract chipmaker. The talks failed in advance of Intel's drastic cost-cutting plans, which included thousands of lay-offs in early August, the report added. Intel and SoftBank did not immediately respond to Reuters' requests for comment.

SoftBank scraps AI chips tie-up plan with Intel, FT reports

(Reuters) - Japanese technology investor SoftBank dropped plans of producing an artificial intelligence chip with Intel to compete with Nvidia, the Financial Times reported on Thursday. The partnership did not materialize after the U.S. chipmaker struggled to meet SoftBank's requirements, according to the report, citing people familiar with the matter. SoftBank has blamed Intel for the collapse of the talks, claiming Intel was incapable of meeting its demands for volume and speed, the report said, adding that SoftBank is now focusing on discussions with Taiwan Semiconductor Manufacturing Co (TSMC), the world's largest contract chipmaker. The talks failed in advance of Intel's drastic cost-cutting plans, which included thousands of lay-offs in early August, the report added. Intel and SoftBank did not immediately respond to Reuters' requests for comment. (Reporting by Shivani Tanna in Bengaluru; Editing by Rashmi Aich)

SoftBank's Intel AI processor plans in doubt as insiders say it is now considering a TSMC partnership

SoftBank has been working with Intel to build AI processors for its Project Izanagi initiative. However, due to Intel's failure to meet 'volume and speed' requirements, SoftBank will shift its focus to TSMC, reports the Financial Times citing its sources. Despite this setback, SoftBank CEO Masayoshi Son remains determined to push forward with his ambitious AI plans and the sources do not rule out working with Intel in the future. Under Project Izanagi, SoftBank planned to develop its own AI processors that would be able to rival Nvidia's AI GPUs in terms of performance and capabilities. Additionally, it would design its own software stack and put it into its own massive AI data centers that would be supplied with their own power plants. SoftBank reportedly wanted Intel to produce the processors, but the processor giant could not meet the Japanese company's requirements for 'volume and speed,' indicate unnamed insiders. Following the breakdown with Intel, SoftBank turned its attention to the world's largest contract chipmaker TSMC, indicates the FT. While discussions are ongoing, no agreement has been reached, as TSMC is currently struggling to meet the demands of its existing customers, including AMD and Nvidia. Another aspect of Project Izanagi's execution is that SoftBank does not have its own chip design expertise. Having said that we must note that it owns Arm, which now develops 'Compute Subsystems' CSS reference implementations of its processors for various workloads. It also recently acquired Graphcore, which produced rather competitive hardware, but failed to make it popular among developers of AI software, partly because Nvidia could offer a significantly better CUDA software stack. Intel reportedly offered SoftBank its chip design expertise, though it is unclear whether it could complete the design on time. Also, it is unclear whether this was meant to be an Arm-based design. Masayoshi Son's AI strategy is broad as he plans to invest billions of dollars to place SoftBank at the forefront of the AI industry -- essentially competing against AWS, Google, Microsoft Azure, and Meta -- in a move that could significantly alter the competitive landscape. Financially, the venture could be enormously costly, potentially running into the tens of billions of dollars or even hundreds of billions of dollars, though it is hard to put a firm number at this point. Son has reportedly reached out to investors in Saudi Arabia and the United Arab Emirates for potential funding, though no concrete agreements have been made. To support his Project Izanagi vision, Son has also been pitching the idea to major tech companies like Google and Meta, seeking their backing and financial support. He believes that with the right partners, SoftBank can help counter Nvidia's dominance in the AI processor sector. However, given the scope of SoftBank's AI initiative which includes hardware, software, data center infrastructure, and data centers themselves, it will inevitably compete against the aforementioned companies, something they might not like. One of the risks associated with Son's plan is the potential impact on Arm's relationship with its key clients. Critics reportedly argue that moving Arm into direct chip design and production could strain its relationships with developers of Arm-based data center processors, but SoftBank is apparently willing to take that risk for the potential reward. Neither Arm, SoftBank, Intel, TSMC, Google, nor Meta issued supporting comments to the Financial Times.