SoftBank seeks OpenAI tie-up as Son plans deal after Arm IPO

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SoftBank is on the lookout for deals in artificial intelligence, including a potential investment in OpenAI, after a blockbuster listing of the UK chip designer’s arm boosted Masayoshi Son’s multibillion-dollar war chest.

Two people familiar with Son’s thinking said the Japanese conglomerate’s founder and chief executive is looking to invest billions in AI after completing Arm’s initial public offering.

Microsoft-backed OpenAI is one of several options SoftBank is considering for a handful of such deals. SoftBank may consider a broader strategic partnership with the ChatGPT maker, these people said.

SoftBank is exploring several alternatives to OpenAI, including investing heavily in direct competitors of the ChatGPT maker, he added. The company has also made preliminary plans to acquire UK-based AI chipmaker Graphcore, he said.

SoftBank said: “We do not comment on rumours.” OpenAI declined to comment. Graphcore denied receiving an offer from SoftBank.

Analysts say Arm’s IPO on Thursday, which raised nearly $5bn in proceeds, will boost SoftBank’s war chest to $65bn, using its own cash as well as its remaining 90 per cent holding in Arm as collateral for the loan.

Son, who said in June that he was a “heavy user” of ChatGPT, has developed a close relationship with OpenAI chief executive Sam Altman. Sona has described Altman as “one of the most important people on earth” and said he talks to him almost every day.

SoftBank’s mobile unit already has a business partnership with OpenAI to serve companies in Japan that want to deploy generative AI technologies like chatbots. The service is based on the Azure computing platform developed by Microsoft, which is OpenAI’s exclusive cloud provider. Earlier this year, Microsoft invested $10bn in OpenAI in a multi-year deal, according to people familiar with the matter.

The SoftBank Mobile subsidiary also said it intends to develop its own Japanese equivalent of ChatGPT.

According to people close to his inner circle, the boy’s enthusiasm for dealmaking has grown strongly in recent months, culminating in June with the prolific tech investor saying he was going back into “criminal mode.”

During the pandemic and the tech downturn in 2022, Sun was in a self-proclaimed “defensive mode,” during which new dealmaking was severely curtailed and the company prepared to shore up its cash position. After focusing on Arm for months in the run-up to its IPO, its successful listing has freed Son to resume dealmaking with renewed vigor, according to people familiar with his thinking.

Son has broader ambitions to establish his Japanese technology conglomerate as a credible contender in the field of AI, including the chips that power the technology.

At the moment, the big winner in AI is Nvidia. The Silicon Valley-based company’s dominance in the market for AI chips has seen its market value exceed $1tn this year. SoftBank took a stake in the chipmaker in 2017 but sold it in 2019.

Arm made AI a key part of its growth story to investors at its IPO roadshow this month, as it looks to diversify from its core smartphone market and expand its reach into cloud computing.

However, analysts say Arm plays a much smaller role than Nvidia — the technology that powers ChatGPT — in building large language models.

Additional reporting by Richard Waters, Sam Agini and Tim Bradshaw

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