SoftBank, the Japanese conglomerate that owns Arm Holdings, has abandoned its plan to partner with Intel to develop a powerful AI chip that would challenge NVIDIA’s dominance in the market. According to a report by the Financial Times, negotiations with Intel faltered due to the chipmaker’s failure to meet SoftBank’s stringent requirements for production volume and speed.
SoftBank had envisioned a rapid path to market by combining its Arm architecture with Intel’s manufacturing capabilities, leveraging the expertise of its recent acquisition, Graphcore. The company’s ambitious goal was to establish Japan as a major player in the burgeoning AI market. SoftBank’s CEO, Masayoshi Son, had even pitched his vision to top technology companies, promising to provide the computing power and software necessary to fuel the AI revolution.
However, the talks with Intel ultimately collapsed in recent months, coinciding with Intel’s announcement of significant cost-cutting measures, including massive layoffs. The company has also been struggling to maintain its market share in the consumer, laptop, and server CPU markets against AMD.
In a dramatic shift, SoftBank has now entered discussions with TSMC, the world’s largest contract semiconductor manufacturer, to build its new AI chip. This decision represents a setback for Intel and the US CHIPS Act, which had been offering billions of dollars in grants and loans to support domestic semiconductor manufacturing. SoftBank’s decision to move production to Taiwan suggests a lack of confidence in Intel’s ability to deliver on its promises.
Sources familiar with the matter told the Financial Times that SoftBank blamed Intel for the breakdown in negotiations, citing Intel’s inability to meet their demands. While the possibility of renewed discussions between the two companies exists, considering the limited number of manufacturers capable of producing cutting-edge chips, SoftBank’s move to TSMC highlights the growing competition in the global chip industry and the importance of securing reliable and efficient manufacturing partners.
Intel, SoftBank, and Arm have all declined to comment on the matter.
