ARM to play key role in advanced AI: Softbank

STUPID GAMBLE?:Despite receiving criticism, Softbank’s CEO is standing by his decision to invest in ARM, saying its chips will find their way into a variety of future devices

Bloomberg

Fri, Jul 22, 2016 - Page 11

Masayoshi Son has news for investors still reeling from Softbank Group Corp’s surprise US$32 billion acquisition of ARM Holdings PLC — the singularity is near.

The chief executive officer of the Japanese technology company took the stage at the annual Softbank World conference in Tokyo to talk about this week’s announcement of his plan to buy the UK-based chip designer. ARM is to play a key role in bringing about advanced artificial intelligence (AI), he said.

That could happen as early as 2018, when the number of transistors on a chip is projected to exceed the number of cells in a human brain, Son said.

“I have been thinking about this non-stop for a year and the answer I arrived at is ARM — it is an important move,” Son said. “ARM will be the center of the center of Softbank.”

So far, investors are not happy with the price tag on the company’s biggest-ever acquisition, which Son says is an investment in the Internet of Things. Softbank’s shares are down about 10 percent since the deal was announced, erasing about ¥750 billion (US$7 billion) in market value, while the company faces the challenge of reducing its US$100 billion-plus debt load and turning around money-losing US unit Sprint Corp.

“People think this was a stupid move, they have voted with their money, shares fell,” Son said. “It is easy to look at where your pieces are now and place the next one nearby. This one is 10, 20, 50 moves ahead.”

ARM focuses on small, low-power devices and does not actually build semiconductors. Instead the company licenses its designs, which are used in most mobile phones, including every iPhone and Samsung Galaxy smartphone.

Son is gambling that the chips will find their way into self-driving cars, virtual-reality devices and machines with artificial intelligence.

Son built Softbank from a PC magazine publisher into a telecommunications giant with investments in e-commerce, energy and robotics by betting early on some of the pivotal technology trends of his time.

The decision to buy ARM was more than 40 years in the making, said Son, who said he recalls when he first saw a picture of an integrated chip in a science magazine while still a student at University of California, Berkeley.

“My fingers and toes went numb. I couldn’t keep from crying,” Son said of that experience. “Finally, humanity was in the position to create an intelligence surpassing its own. What a tremendous impact this will have.”