SoftBank Eyes $10 Billion Push into AI Power and Chips

SoftBank Eyes $10 Billion Push into AI Power and Chips

SoftBank is gearing up to pour billions into critical AI infrastructure: power and chips. A new report from The Information says the Japanese conglomerate is talking to banks about funding up to $10 billion in energy projects, while also scheming to get its hands on massive amounts of highly sought-after NVIDIA GPUs.

CEO Masayoshi Son wants to position SoftBank as a gobal leader in the AI race, and he's zeroing in on the critical infrastructure. As AI models balloon in size and complexity, they're devouring more power than ever. Son sees this power crunch as a major roadblock.

"Power will be one of the biggest bottlenecks," Son told shareholders last month in Tokyo. He's eyeing breakthroughs in solar, nuclear, and even fusion tech to fuel AI's insatiable appetite.

Parallel to its energy initiatives, SoftBank is exploring creative financial structures to secure access to NVIDIA's GPUs, which have become the de facto standard for AI development. One potential arrangement involves setting up a special purpose company to purchase chips using bank loans, which would then lease the hardware back to SoftBank. This approach could allow the company to keep the substantial debt off its balance sheet while still gaining access to these critical components.

SoftBank's focus on infrastructure marks a departure from the company's previous strategy of investing directly in AI startups. Sources indicate that Son has become more selective in his AI investments, even reportedly blocking the Vision Fund from participating in a funding round for Mistral. This move suggests a shift towards strategic partnerships and infrastructure plays rather than broad startup investments.

At the heart of SoftBank's AI ambitions is Arm, the chip designer it scooped up in 2016. Arm's energy-efficient CPU designs are gaining traction in AI data centers, complementing NVIDIA's GPU dominance. With Arm's value more than doubling since its IPO, Son's bet on chip tech is already paying off.

SoftBank's massive play for AI infrastructure highlights the enormous investment needed to keep pace with the technology's explosive growth. As companies scramble for power and chips, SoftBank's moves could set the tone for the next phase of the AI arms race.

Chris McKay is the founder and chief editor of Maginative. His thought leadership in AI literacy and strategic AI adoption has been recognized by top academic institutions, media, and global brands.

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