SoftBank in talks to get its hands on large volumes of Nvidia’s GPUs: Report

Japanese technology-focused investor SoftBank (TYO:9984) is in discussions to find a way to secure a large volume of Nvidia’s graphics processing units (GPUs) which are critical for artificial intelligence (AI) development.

The latest move appears to be a part of CEO Masayoshi Son’s broader plan to position SoftBank as a leader in AI technology, for which it has started discussions with banks about borrowing money to fund up to $10 billion in energy-related projects driven by AI demand, The Information reported on Thursday. 

SoftBank, a backer of companies like Tencent (HK:0700), T Mobile, 10x Genomics (NASDAQ:TXG), and Automation Anywhere, among others, could look to create a special-purpose company to purchase the GPUs with borrowed funds, and would then lease the GPUs to SoftBank, allowing the firm to keep the debt off its balance sheet. 

The ongoing discussions show SoftBank's intent to increase its exposure to AI infrastructure. Its plans to secure Nvidia (NASDAQ:NVDA) GPUs show the growing importance of these chips in advancing AI technologies, especially in their role in processing complex AI algorithms.

Meanwhile, SoftBank is also looking into energy investments to address the power demands of AI data centers. Innovations in renewable energy and nuclear technologies are being considered to ensure sufficient power supply for these centers. 

On the contrary, Son has so far shied away from making investments in generative AI companies, which have recently become the darlings of investors across geographies. The Information reported that he even blocked SoftBank’s Vision Fund from making an investment in Paris-headquartered open-source model developer Mistral. 

He, instead, is pinning all his hopes on Arm, the UK-based chip designer that SoftBank acquired in 2016. Son sees Arm as the centerpiece of his AI ambitions, with its designs being crucial for the evolution of AI chips in the future. Arm's recent IPO and its growing market capitalization have strengthened SoftBank's position in the AI hardware sector.