SoftBank’s subsidiary, previously attempted to be acquired by Nvidia, could potentially turn SoftBank into a leading AI stock.

SoftBank Group, the Japanese multinational conglomerate, is positioning itself to become the next hot artificial intelligence (AI) stock through its subsidiary, Arm. CEO Masayoshi Son recently announced that SoftBank is preparing to leverage Arm, a UK chip designer that was acquired for $32 billion in 2016. Arm is expected to profit from investments in computational power, while its upcoming initial public offering has been estimated to be worth $60 billion, according to reports from Jefferies. Despite a failed acquisition attempt by Nvidia last year, Arm and Nvidia continue to maintain a relationship, with Nvidia using Arm’s architecture for its Grace server chips to compete with Intel and Advanced Micro Devices in the central processors for data centers market. SoftBank’s Vision Fund, which has been dealing with losses for the past few quarters, is also expected to benefit from the general tech stock rally. However, there are concerns that Son’s aggressive investment style could lead to significant losses, as witnessed two years ago when SoftBank invested heavily in startups at high valuations during the pandemic.