Arm, a processor designer owned by SoftBank, has unveiled plans to create its own artificial intelligence (AI) chips, driven by profits from AI-related ventures. According to a report from Nikkei Asia on May 13, Arm will establish a division dedicated to AI chip development, aiming to release its inaugural protocol by spring 2025 and commence mass production by autumn of the same year.

The initial costs of development, expected to amount to hundreds of billions of yen, will be covered by Arm, with financial backing from SoftBank, which holds a 90% stake in the company. Once mass production is underway, there is potential for the AI chip business to become a standalone entity under SoftBank's umbrella. SoftBank is reportedly in discussions with Taiwan Semiconductor Manufacturing Corp and other firms to secure production capacity for the chips.

Arm is renowned for providing technology utilized in the primary chips of nearly all smartphones and tablets, boasting a market share exceeding 90% in processor architecture for smartphones. Additionally, Arm supplies architecture to Nvidia, a leading developer of AI chips. By venturing into the development of its own chips for advanced AI models, Arm aims to reduce its dependence on Nvidia.

SoftBank recently reported a net profit in the final quarter of its fiscal year for 2024, following a strategic shift towards AI-focused initiatives. Arm played a pivotal role in the company's strategic vision for the forthcoming year. Yoshimitsu Goto, SoftBank's chief financial officer, highlighted the growing significance of the AI sector for the group, emphasizing Arm's central role in their AI-focused endeavors.

Arm's stock experienced a significant surge of 30% in February, driven by its ambitious plans in the field of AI. The company joins a growing list of technology developers seeking to develop AI chips internally to reduce reliance on external providers like Nvidia. Moreover, Samsung recently secured a substantial grant to expand its Texas facility for semiconductor chip manufacturing, signaling a broader trend in the industry towards self-sufficiency in chip production. In February, reports emerged that OpenAI, the organization behind ChatGPT, one of the world's most powerful AI chatbots, is seeking significant investments to commence manufacturing its own chips.