Arm Holdings' AI chip: Arm Holdings, a subsidiary of SoftBank Group, is gearing up to venture into the development of artificial intelligence (AI) chips, with plans to unveil the initial products by 2025, according to a report by Nikkei Asia.

The UK-based company intends to establish a dedicated division for AI chip development and aims to have a prototype ready by the spring of 2025. Mass production of these chips will be outsourced to contract manufacturers, with production expected to commence in the autumn of the same year.

Initial development costs, potentially amounting to hundreds of billions of yen, will be covered by Arm, with contributions from SoftBank. Notably, there are discussions regarding the potential spin-off of the AI chip business under SoftBank's umbrella once a mass-production system is established.

SoftBank is reportedly in negotiations with Taiwan Semiconductor Manufacturing Corp and other manufacturers to secure production capacity for the AI chips. Meanwhile, Arm, SoftBank, and TSMC declined to comment on the matter when approached by Reuters.

The move by Arm reflects a strategic expansion into the AI chip market, driven by the growing demand for specialized chips in data centres to power advanced AI models and reduce dependency on existing suppliers like Nvidia.

(With inputs from Reuters)