Arm might Spin off AI Chip Division after 2025

In 2023, NVIDIA emerged as a dominant force in the AI landscape by securing a substantial volume of AI chip orders through the sale of data center GPUs, solidifying its position as a leading player in the industry. This achievement has sparked keen interest among numerous chip design companies, all eyeing the burgeoning AI chip market with the aim of capitalizing on the opportunities presented by advancements in AI technology and maximizing profitability.
According to a report from Nikkei Asia, Arm, a subsidiary of the SoftBank Group, is actively developing AI processors tailored for integration into SoftBank’s data centers. The report reveals that Arm has established a specialized department dedicated to AI processors at its UK headquarters, with the goal of producing prototypes by spring 2025, followed by an official release in the same period and subsequent mass production at wafer foundries commencing in fall 2025. SoftBank is poised to shoulder the initial development costs, which are anticipated to amount to several hundred billion yen.
In line with its strategy, SoftBank plans to establish Arm-based data centers across key regions, including the United States, Europe, Asia-Pacific, and the Middle East, by 2026. Acknowledging the substantial power requirements of data centers, SoftBank also aims to expand its presence in the power generation sector by developing wind and solar energy facilities and exploring advancements in next-generation nuclear fusion technology.
The report suggests that upon the commencement of mass production of Arm’s AI processors, there may be consideration for spinning off the AI chip business. Additionally, SoftBank seeks to implement a comprehensive strategy in the AI domain to bolster the competitiveness of its data center, robotics, and power generation divisions while fostering innovation. SoftBank’s CEO, Masayoshi Son, has underscored the transformative potential of general artificial intelligence across various industries, including shipping, pharmaceuticals, finance, manufacturing, and logistics.
Market statistics indicate a significant expansion in the AI chip market size, with projections estimating a surge from USD 30 billion in 2024 to over USD 100 billion by 2029, surpassing USD 200 billion by 2032. Consequently, despite NVIDIA’s current leadership position, numerous chip companies are actively vying to meet the growing demand for AI chips across diverse industries, positioning themselves to seize opportunities in this rapidly expanding market.
Source: trendforce.com

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