Masayoshi Son, CEO of Japan’s SoftBank, wants to transform the tech conglomerate’s Arm subsidiary into an AI powerhouse, and he is investing $64 billion (10 trillion yen) to implement the plan, which includes turning the UK-based unit into an AI chip supplier. Son announced that by spring 2025 Arm is expected to have its first prototype, followed by mass production by contract suppliers and commercial sales in the fall. Arm designs but does not manufacture circuitry, supplying what it calls “chip architecture” to customers including Nvidia and Qualcomm.

Arm holds “more than 90 percent share in architecture for processors used in smartphones,” according to Nikkei, which broke the news of Arm’s AI move. Apple and AMD license Arm IP which they then incorporate into their own chip design.

Founded in 1990 and purchased in 2016 by SoftBank Group (which holds a 90 percent stake), Arm’s principal innovation is the way it uses reduced instruction set computing (RISC) in its proprietary architecture, used in CPUs and GPUs.

Arm says its processor architecture is “the most pervasive in the world, with more than 280 billion Arm-based chips shipped by our partners over the past three decades in products ranging from sensors, wearables and smartphones to supercomputers.”

Arm will cover the initial AI infrastructure development costs, “expected to reach hundreds of billions of yen,” per Nikkei, with SoftBank carrying some of that, and eventually controlling an AI chip business unit that once mass-production is established could be spun off.

“Under Son’s vision of an AI revolution, SoftBank aims to expand to data centers, robots and power generation,” writes Nikkei, which says “he envisions bringing together the latest AI, semiconductor and robotics technologies to spur innovation in various industries,” adding that “AI chips that can process large volumes of data is at the core of that project.”

Reuters reports that Nvidia — which in 2020 tried to purchase Arm for $40 billion but had the deal quashed by the FTC — controlled roughly 83 percent of the data center market for AI chips in 2023, “with a majority of the remaining 17 percent share held by Google’s custom tensor processing units,” which Google does not sell directly.

Arm’s most recent quarterly earnings, released May 8, showed a 47 percent earnings increase to $928 million on fiscal 2024 revenue of more than $3.2 billion. Arm CEO Rene Haas said on the investor call he expects revenue to be close to $4 billion dollars for fiscal 2025, which began April 1.

After three consecutive years of losses, “SoftBank Group said its net asset value surged thanks to [Arm], and that it has committed to five investments in artificial intelligence on the scale of $1 billion each,” writes The Wall Street Journal.