According to the Financial Times Intel failed to meet SoftBank’s 'volume and speed' requirements and it is being wooed by TSMC.
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 AI processors that would rival Nvidia's AI performance and capabilities. Additionally, it would design a software stack and put it into its own massive AI data centres, complete with its own power plants.
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 chip design expertise. However, it owns Arm, which now develops 'Compute Subsystems' CSS reference implementations of its processors for various workloads.
It recently acquired Graphcore, which produced somewhat competitive hardware but failed to gain popularity among AI software developers, 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 or whether it 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 on it now. Son has reportedly contacted investors in Saudi Arabia and the United Arab Emirates for potential funding, though no concrete agreements have been made.
Son has also been pitching the idea to major tech companies like Google and Meta, seeking their backing and financial support to support his Project Izanagi vision. He believes that SoftBank can help counter Nvidia's dominance in the AI processor sector with the right partners. However, given the scope of SoftBank's AI initiative, which includes hardware, software, data centre infrastructure, and data centres themselves, it will inevitably compete against those customers.
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 centre processors. Still, SoftBank is willing to take that risk for the potential reward.
