SoftBank Invests $6.5 Billion in Ampere Computing, Betting on AI Chip Future
SoftBank Group Corp. has announced a definitive agreement to acquire Ampere Computing, a Silicon Valley-based semiconductor startup, for $6.5 billion. The move signifies a substantial investment in technology derived from smartphone architecture, anticipating its growing prominence in data centers globally.
This acquisition underscores SoftBank’s confidence in Ampere’s processors playing a pivotal role in the rapidly expanding field of artificial intelligence, an area where Nvidia Corp. has currently established market leadership.
Ampere’s Arm-Based Technology and SoftBank’s Vision
Founded eight years prior, Ampere specializes in developing data center chips based on designs licensed from Arm Holdings, a British firm whose technology underpins the vast majority of mobile devices. SoftBank, having acquired Arm in 2016, aims to broaden the adoption of Arm-based chips across diverse applications and industries.
Masayoshi Son, Chairman and CEO of SoftBank Group, stated, “The future of artificial superintelligence demands groundbreaking computational capabilities. Ampere’s expertise in semiconductors and high-performance computing is crucial to realizing this vision, reinforcing our dedication to AI innovation within the United States.”
Strategic Acquisition Amidst AI Chip Demand
SoftBank confirmed Ampere will operate as a wholly-owned subsidiary, retaining its current brand identity.
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This acquisition occurs amidst a surge in strategic deals and alliances within the semiconductor industry, propelled by intense demand for specialized chips powering AI applications like OpenAI’s ChatGPT. SoftBank has been actively engaging in strategic transactions to strengthen its position in this sector.
Notably, Masayoshi Son, alongside OpenAI CEO Sam Altman, and Oracle Chairman Larry Ellison (a major Ampere investor and client), publicly announced the “Stargate” initiative with former President Trump in January.
The Stargate project, envisioned by Son, Altman, and Ellison, outlines a potential $500 billion investment in building a network of U.S. data centers to support OpenAI’s operations, initially in Texas. Nvidia is designated as a key technology partner, supplying Graphics Processing Units (GPUs) vital for many AI computations.
The Role of Microprocessors in AI
Beyond GPUs, microprocessors, designed by companies like Intel, AMD, and Arm, are essential for general-purpose computing tasks in AI. Serving as “host” processors alongside GPUs, they manage critical AI functions, such as developing software models. Typically, one microprocessor is deployed for every four Nvidia GPUs.
These microprocessors also handle “inferencing,” an AI task involving generating responses in applications like chatbots. Currently, Intel and AMD processors dominate the AI host processor and inferencing microprocessor market.
Shifting Landscape and Market Projections
However, influential industry players are advocating for change. Nvidia is actively promoting Arm-based processors as viable alternatives to Intel and AMD for host microprocessor functions.
Significant market growth is anticipated in this sector. Market research firm IDC projects the AI microprocessor market to expand to $33 billion by 2030, from $12.5 billion in 2025.
Intel and AMD contend that transitioning to Arm architecture can involve substantial software modifications. They also emphasize Nvidia’s continued support for their chips alongside its GPUs, indicating a multi-faceted approach.
Ronak Singhal, Chief Architect of Intel’s Xeon data center chip line, affirmed, “Nvidia remains a significant partner of ours.”
Ampere’s Aurora Chip and Market Position
Ampere primarily markets its microprocessors for general data center workloads. However, their newly announced Aurora chip, featuring up to 512 processing cores, is specifically designed for AI inferencing applications.
Led by CEO Renée James, a former Intel executive, Ampere has achieved some market traction. Yet, major industry consumers like Amazon, Google, and Microsoft are increasingly investing in developing their own Arm-based microprocessors, reducing reliance on startups like Ampere, with the exception of Oracle.
Oracle has incorporated Ampere chips into its cloud services and has disclosed substantial equity and debt investments in the company. As of May, Oracle reported a 29 percent stake in Ampere, valuing its investments, net of losses, at $1.5 billion.
As part of this acquisition agreement, both Oracle and Carlyle Group, another significant Ampere investor, have agreed to divest their stakes in Ampere, according to SoftBank.
Bloomberg News previously reported in the preceding month that SoftBank was nearing a deal to acquire Ampere.