According to AFP news agency, SoftBank Group rose 1.89% to 8,026 yen ahead of its earnings report scheduled after the closing bell. The company's chip subsidiary, Arm Holdings, was reported to be preparing to launch artificial intelligence-equipped chips by 2025, leading to a rise in stock prices.
According to a report from Nikkei Asia, UK-based Arm is developing an AI-powered chip and aims to launch it in 2025, Reuters reported. The company added that it is ready to set up a specialized department for AI chip development and aims to launch its first product by 2025.
Prototype development/mass production planning
According to the report, Arm Holdings plans to begin the development process immediately and aims to complete the prototype by spring 2025. Mass production of this AI chip is scheduled to begin in the fall of the same year, and manufacturing work will be outsourced to a contract manufacturer.
Arm Holdings will primarily bear the initial development costs, which are estimated to amount to hundreds of billions of yen. According to the report, SoftBank Group is also expected to contribute funding.
The Nikkei report further suggests that the AI chip business is expected to be spun off and brought under the SoftBank Group once the mass production infrastructure is established. Negotiations are reportedly underway with Taiwan Semiconductor Manufacturing Corporation (TSMC) and other potential manufacturing partners to secure production capacity.
According to the report, Arm Holdings, SoftBank Group and TSMC did not respond to inquiries. Livemint could not independently verify the report.
Expansion and market performance
Arm Holdings, known for licensing its chip designs and generating revenue through royalties, is diversifying its portfolio by entering the data center market. According to the report, surging demand for AI computing is the main driver of this expansion.
Excitement about Arm's potential in the AI computing space has driven the company's stock price significantly higher since its initial public offering last September. The company's market value currently exceeds $100 billion.
SoftBank Group is expected to report a deterioration in performance when it releases its earnings report on Monday. Investors are eagerly awaiting insight into the company's new growth investments.
(Information provided by Reuters and AFP)
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