Computer chip designer Arm Holdings Plc is reportedly set to enter the artificial intelligence chip market and is seeking to launch its first product next year.

The decision by Arm to develop its own AI chips is said to be part of a move by parent company SoftBank Group Corp. to transform the group into a sprawling AI powerhouse. Although Arm has been publicly listed since its initial public offering in September, SoftBank still owns approximately 90% of the company.

Nikkei Asia reported today that Arm will set up an AI chip division and is aiming to build a prototype by the northern spring of 2025. Mass production, which will be contracted out to chip manufacturers, including Taiwan Semiconductor Manufacturing Company Ltd., is expected to start later the same year.

Arm will reportedly shoulder the initial development costs, expected to be in the hundreds of billions of yen – 100 billion yen at the current exchange rate is $642 million. SoftBank is also expected to contribute funds to assist. According to Nikkei, once a mass-production system is established, the AI chip business could be spun off and placed under SoftBank.

Arm already supplies circuit architecture for processors used in smartphones and graphic processor units, but the move to design and then subcontract manufacture AI chips would be a first for the company. Currently, Arm makes most of its money through the royalties it collects every time a company makes a chip using its designs. Now, if its vision is realized, Arm will compete with those same companies.

Visions are not rare when it comes to SoftBank Chief Executive Officer Masayoshi Son, who is said to be spearheading the push. Son has a vision of an “AI revolution,” with SoftBank aiming to expand to data centers and robots and. His vision includes bringing together AI, semiconductor and robotics technologies to spur innovation in various industries.

SoftBank plans to build data centers equipped with homegrown Arm chips in the U.S., Europe, Asia and the Middle East as early as 2026. Because Son has never been shy in thinking big, SoftBank also plans to branch out into power generation through windmills and solar power farms, with an eye on next-generation fusion technology to power their data centers.

While ambitious, Son’s plans are certainly achievable, but what remains unknown is whether Arm will make its designs available to its existing customers or how those customers will respond to Arm entering the AI chip market. SoftBank’s plans to build data centers using its own AI chips will also see it compete against the likes of Amazon Web Services Inc. and Microsoft Corp., both of which currently license Arm circuit architecture for processors.

Image: Arm