Talks between SoftBank and Intel related to the development of an AI chip to rival Nvidia have reportedly collapsed.
According to the FT, Intel has been unable to meet the requirements laid out by the Japanese conglomerate, leading the company to enter into negotiations with TSMC – a company that is also facing challenges around capacity due to growing demand for Nvidia’s upcoming Blackwell chip offering.
Citing people with knowledge of the situation, the FT said SoftBank blames Intel for the talks collapsing, with the chipmaker unable to meet the speed or volume demands put forward by the conglomerate. However, given the limited number of chip manufacturers capable of producing cutting-edge AI chips, the report said a deal between the two companies might still be reached.
Separately this week, Intel sold its stake in British chip design firm Arm, netting approximately $146.7 million from the sale of its 1.18 million shares.
SoftBank, Intel, and TSMC all declined to return the FT’s requests for comment.
SoftBank has long been interested in entering the AI chip space, with reports that the company’s founder Masayoshi Son was looking to raise $100 billion for an AI chip venture dubbed Izanagi to compete with Nvidia first surfacing in February 2024.
In July, SoftBank acquired struggling British AI chip designer Graphcore for an unconfirmed amount. The conglomerate also owns a majority stake in Arm, having bought the British chip designer for $32 billion in 2016 and retained a controlling interest in the company when it re-floated on the stock market last year.
Intel has had a challenging 2024, with its foundry business having reported billions of dollars in losses over the past several quarters. Despite Intel Foundry seeing a year-on-year (YoY) revenue increase of four percent in Q2 2024, the business unit posted a loss of $2.8bn during the quarter, up from the $2.5bn operating loss it recorded during the first quarter of 2024.
Along with a company-wide net loss of $1.6 billion for Q2 2024, CEO Pat Gelsinger announced that Intel would be cutting more than 15,000 jobs as part of a $10bn cost-saving plan.
Despite its financial woes, Intel is pushing ahead with its efforts to return the company to its former chipmaking glory. Earlier this month the company announced its first two 18A products were out of the fab, had powered on, and were on track to start production in 2025.
