SoftBank’s (OTCPK:SFTBY)(OTCPK:SFTBF) $2B investment in Intel (NASDAQ:INTC) proves to be supportive of Arm Holdings’ (NASDAQ:ARM) own chip development and could provide additional foundry capacity, according to Wells Fargo.
“We believe investors could view this investment as further evidence that Arm will develop its own AI chip as SoftBank’s Intel investment could provide optionality for foundry capacity,” said Wells Fargo analysts Joe Quatrochi and Travis Poulin in an investor note.
The Japanese-based SoftBank holds 87% ownership of Arm.
“As a reminder, IFS & Arm announced a collaboration in 2023 to enable chip designers to build low-power SoCs using Intel’s 18A—initially focused on mobile w/ plans to expand to automotive, IoT, data center, etc.,” Quatrochi added.
SoftBank’s investment in Intel will make it the sixth largest investor in the Santa Clara-based semiconductor firm, with an equity stake of about 2%.
On Monday, it was revealed that Arm hired Amazon’s (AMZN) artificial intelligence chip director Rami Sinno as the British semiconductor designer appears to be moving forward on its plans to build its own complete chips. Sinno played a key role in the development of Amazon’s in-house AI chips, Trainium and Inferentia, which are designed to help build and run large AI applications.
In July, Arm’s CEO Rene Haas said they have increased research and development spending as the company is considering developing its own chips. Arm has also hired Nicolas Dube, a former HPE (HPE) executive with large-scale systems design experience, and Steve Halter, a chip engineer with experience at Intel and Qualcomm (QCOM).
SoftBank continues to expand its stake across the entire spectrum of artificial intelligence. In the last year, SoftBank has acquired British AI chipmaker Graphcore and, more recently, Ampere, a silicon design company focused on high-performance, energy-efficient AI computing based on the Arm platform. SoftBank has also become a primary investor in OpenAI.