The report states that MGX — a state-backed group in Abu Dhabi — is in discussions to support OpenAI’s venture to build AI chips in-house. This information comes from two individuals with knowledge of the discussions.

In order to achieve its goal of creating semiconductor chips internally, OpenAI is reportedly seeking investments worth trillions of dollars from investors worldwide. By manufacturing its own chips, the San Francisco-based company aims to reduce its reliance on Nvidia, the current global leader in semiconductor chip technology.

As part of its funding efforts, OpenAI struck a deal with Thrive Capital in February 2023, which reportedly increased the company’s valuation to more than $80 billion, marking an almost threefold increase in under 10 months.

This comes as the UK semiconductor sector gains enhanced access to research funding through the country’s participation in the EU’s ‘Chips Joint Undertaking’.

The UK’s participation in the Chips Joint Undertaking provides the British semiconductor sector with enhanced access to a €1.3 billion pot of funds set aside from Horizon Europe to support research in semiconductor technologies up to 2027. The move is backed by an initial £5 million from the UK government this year, with an additional £30 million due to support UK participation in further research between 2025 and 2027.

“Our membership of the Chips Joint Undertaking will boost Britain’s strengths in semiconductor science and research to secure our position in the global chip supply chain,” said Technology Minister Saqib Bhatti. “This underscores our unwavering commitment to pushing the boundaries of technology and cements our important role in shaping the future of semiconductor technologies around the world.”

Back in the UAE, MGX — the group behind the potential investment in OpenAI — is an AI-focused fund launched earlier this week and headed by the UAE’s national security adviser, Sheikh Tahnoon Bin Zayed al-Nahyan. The fund was established in collaboration with G42 and Mubadala, with G42 having already entered into a partnership with OpenAI in October 2023 as part of the company’s Middle East expansion.

During the G42 partnership deal, OpenAI CEO Sam Altman stated that they plan to bring AI solutions to the Middle East that “resonate with the nuances of the region.”

One of the sources briefed on the MGX fund emphasised, “They’re looking at creating a structure that will put Abu Dhabi at the centre of this AI strategy with global partners around the world.”

As the race to develop cutting-edge semiconductor technologies intensifies, both the UAE and the UK-EU are positioning themselves as key players.

(Photo by Wael Hneini on Unsplash)

See also: EU approves controversial AI Act to mixed reactions

Want to learn more about AI and big data from industry leaders? Check out AI & Big Data Expo taking place in Amsterdam, California, and London. The comprehensive event is co-located with other leading events including BlockX, Digital Transformation Week, and Cyber Security & Cloud Expo.

Explore other upcoming enterprise technology events and webinars powered by TechForge here.

The post UAE set to help fund OpenAI’s in-house chips appeared first on AI News.

The Chinese venture of the British semiconductor icon began operating as an independent company and conducted its own in-house R&D to create new IP. Dylan Patel, Chief Analyst at SemiAnalysis, even penned a piece titled: ‘The Semiconductor Heist Of The Century – Arm China Has Gone Completely Rogue’.

Arm-owner SoftBank sold 51 percent of its stake in the Chinese venture, Arm Limited, to a consortium of Chinese investors for $775 million. With its remaining stake, SoftBank no longer had a majority to make any major decisions.

Arm China fired its CEO, Allen Wu, in June 2020 after he was accused of offering discounts to customers if they invested in his side hustle, Alphatecture. However, Wu refused to leave arguing that: “Arm China did not convene any valid board meeting”.

What followed was lawsuits to oust Wu from his post. In the meantime, Wu reportedly got rid of staff loyal to Arm from Arm China and even employed security guards in a bid to keep out unwanted guests to retain his position.

However, Nikkei and Reuters have reported that Wu has now been removed.

SoftBank will be pleased with the news as the certainty it provides will make it easier for the company to launch an IPO of Arm.

Arm is set to launch an IPO after the collapse of a $40 billion acquisition offer from Nvidia. The deal collapsed following scrutiny from numerous global regulators that were concerned Nvidia could limit rivals’ access to Arm’s chip designs or shift resources towards areas that benefit its new owner.

SoftBank considered and subsequently rejected the idea of pursuing an IPO (Initial Public Offering) of the company in 2019 and again in early 2020.

“We contemplated an IPO but determined that the pressure to deliver short-term revenue growth and profitability would suffocate our ability to invest, expand, move fast, and innovate,” explained Simon Segars, CEO of Arm, in January.

The company’s hand is now being somewhat forced through a lack of alternative options.

Arm has struggled from relatively flat revenues and rising costs despite the huge success of the company’s licensees such as Apple, Qualcomm, and Amazon. However, SoftBank has been keen to hype the company’s future prospects.

“Arm is becoming a centre of innovation not only in the mobile phone revolution, but also in cloud computing, automotive, the Internet of Things, and the metaverse, and has entered its second growth phase,” said Masayoshi Son, Representative Director, Corporate Officer, Chairman, and CEO of SoftBank Group.

In March, Arm announced that it was cutting up to 1,000 jobs from its global workforce. The move was seen as a bid to show potential investors that it’s running a leaner operation.

“To stay competitive, we need to remove duplication of work now that we are one Arm; stop work that is no longer critical to our future success; and think about how we get work done,” wrote Arm CEO Rene Haas in an email to staff.

Haas, the former head of Arm’s intellectual property unit, recently took over as the company’s chief executive as part of its internal strategy shakeup to help navigate it through these choppy waters.

(Photo by Laurent Perren on Unsplash)

Want to learn more about AI and big data from industry leaders? Check out AI & Big Data Expo taking place in Amsterdam, California, and London.

Explore other upcoming enterprise technology events and webinars powered by TechForge here.

The post Arm takes back control of its Chinese biz ahead of IPO appeared first on AI News.

The deal caught the attention of global regulators with anti-competition investigations launched in several jurisdictions including the UK, EU, and US.

In November 2021, UK Digital Secretary Nadine Dorries decided to block the merger pending the results of a 24-week ‘Phase 2’ investigation.

With the merger looking almost impossible to be approved by regulators, Nvidia has decided to throw in the towel.

Jensen Huang, Founder and CEO of Nvidia, said:

“Arm has a bright future, and we’ll continue to support them as a proud licensee for decades to come.

Arm is at the centre of the important dynamics in computing. Though we won’t be one company, we will partner closely with Arm.

The significant investments that Masa has made have positioned Arm to expand the reach of the Arm CPU beyond client computing to supercomputing, cloud, AI, and robotics.

I expect Arm to be the most important CPU architecture of the next decade.”

Arm has struggled from relatively flat revenues and rising costs despite the huge success of the company’s licensees such as Apple, Qualcomm, and Amazon.

SoftBank, Arm’s current owner, considered and subsequently rejected the idea of pursuing an IPO (Initial Public Offering) of the company in 2019 and again in early 2020.

“We contemplated an IPO but determined that the pressure to deliver short-term revenue growth and profitability would suffocate our ability to invest, expand, move fast, and innovate,” explained Simon Segars, CEO of Arm, last month.

Following the collapse of the Nvidia acquisition, Softbank will now have to reconsider an IPO for Arm.

Dr Lil Read, Analyst in the Thematic Research Team at GlobalData, commented:

“Softbank now needs to think of Arm’s future. An initial public offering (IPO) looks likely – the UK government would surely like to see the home-grown chip designer float in London, and potential IPO reforms could create the perfect environment for this. 

Otherwise, Arm may be ripe for a takeover by a private equity consortium backed by chip-friendly giants such as Apple, Qualcomm, and TSMC – Arm’s largest customers.”

Some of Nvidia’s rivals are said to have offered to invest in Arm if it helps the company to remain independent. A takeover from a private equity consortium looks to be Arm’s best option. If the company has to launch an IPO, it could struggle and will face some difficult choices.

Arm’s largest market, mobile, is saturated. The company will struggle to crack the datacentre and PC markets in the face of strong incumbents like Intel and AMD that have established ecosystem of developers, software, systems, and peripherals, and profits that enable them to make large R&D investments.

In an earlier response to the UK’s Competition and Markets Authority, aiming to quell the regulator’s fears about its acquisition of Arm, Nvidia wrote:

“Nvidia is particularly concerned that these pressures would drive Arm to deprioritize datacenter and PC and to instead focus on its core mobile and growing IoT businesses.

The result would be a concentrated CPU market largely controlled by Intel/AMD (x86).”

Capital markets would likely expect Arm to cut costs to maximise the company’s value. However, SoftBank sounds bullish on its prospects.

“Arm is becoming a centre of innovation not only in the mobile phone revolution, but also in cloud computing, automotive, the Internet of Things, and the metaverse, and has entered its second growth phase,” said Masayoshi Son, Representative Director, Corporate Officer, Chairman, and CEO of SoftBank Group.

Arm has announced a management shake-up in the wake of Nvidia’s exit from the deal.

Rene Haas, the former head of Arm’s intellectual property unit, will take over as the company’s chief executive and lead it during these challenging times. Haas previously worked at Nvidia for seven years.

With the Nvidia acquisition off the table, we can only hope that Haas finds a way to ensure Arm can continue to deliver the semiconductor innovation that it has for three decades.

(Photo by Dustin Tramel on Unsplash)

Want to learn more about AI and big data from industry leaders? Check out AI & Big Data Expo. The next events in the series will be held in Santa Clara on 11-12 May 2022, Amsterdam on 20-21 September 2022, and London on 1-2 December 2022.

Explore other upcoming enterprise technology events and webinars powered by TechForge here.

The post Nvidia exits from its proposed $40B acquisition of Arm appeared first on AI News.