SoftBank looking to develop the largest AI data center in the world: CEO

[00:00:00] Speaker 1: Joining me now on a Fox Business exclusive, live from the floor of the New York Stock Exchange is Rene Haas, who in addition to his role as CEO of Chip Design and Chipmaker Arm, was recently named CEO of SoftBank Group International. As if you didn't already have so much to do. [00:00:15] Rene Haas: Thanks Liz, it's a fun time to be in this business for sure. [00:00:17] Speaker 1: I would imagine. Let's talk about this neocloud business that SoftBank just announced. Tell us exactly what it would be and is it a sign that there is a compute glut so much so that they can build it out and start renting some of that? [00:00:32] Rene Haas: Yeah, I don't think so. I think it's a continuation of a statement that Masa made last week at our annual general meeting. Masa Son. Masa Son, yeah, from the head of SoftBank Group. If you look at the SoftBank ecosystem, OpenAI, AI, robotics, infrastructure, SoftBank Energy, Arm Compute, SoftBank has a lot of assets as a company and a group to get into this business. So the announcement of SoftBank Neo, which is SoftBank Corp, the telecom carrier, jointly with SoftBank Group, the parent company, offering neocloud services. I think SoftBank is very uniquely positioned to win in this game where the scale is getting really large, Liz. We're talking gigawatts, as you said, half a trillion dollars investment. Not many companies can do that. SoftBank's one of them. [00:01:17] Speaker 1: Okay, let's not toss that away. Portsmouth, Ohio data center that SoftBank is in the process of building. A half a trillion dollars they will be spending on this. Tell us exactly how that project is going. And can I ask, will that some of the neocloud business be operated out of Portsmouth, [00:01:35] Rene Haas: Ohio? Yeah, today we're not talking about that SoftBank Neo being involved there, but the Portsmouth, Ohio, is a SoftBank Group project, meaning SoftBank Energy is involved, SoftBank Corp is involved, SoftBank Group is involved. But most importantly, it's a gigantic project in Ohio where the power generation, up to 10 gigawatts, is actually being funded by the Japanese government in assistance with SoftBank Group. It's a gigantic infrastructure project, great for the state of Ohio, great for the United States, and a huge level of compute. Well, is that a way to get ahead of what has really [00:02:08] Speaker 1: become the NIMBY crowd, the not-in-my-backyard crowd, or the banana crowd, build absolutely [00:02:13] Rene Haas: nothing anywhere near anything? You know, it's an old site that actually used to be used for nuclear power. So it's actually the regentrification of a site that was involved in this area before. Yeah, it was a Cold War uranium enrichment site. That's right, that's right. And it's going to create lots of jobs in full scale out, over 30,000 construction jobs, and actually, Liz, 4,000 jobs that are permanent jobs. There's this belief that data centers don't create long-term opportunities. Fully loaded, about 4,000 real full-time jobs. [00:02:43] Speaker 1: Let me push you on the bubble talk, because after the report came out, it was a Bloomberg report yesterday that Meta was going to sell excess compute. Personally, I thought they didn't have enough compute. That's why they're striking deals right and left. But now they're saying, at least Bloomberg says that they're going to build that out and sell some of that, or at least rent it. One of the analysts came out and called Meta the first hyperscaler to admit to a compute glut and said it signals the AI infrastructure bubble may be bursting. What's your [00:03:15] Rene Haas: response to that? I don't share that opinion. If you look at the large deal that SpaceX X.ia did with Anthropic, that's basically Elon, who's doing his own compute, providing compute for someone doing frontier models like Anthropic. I view the Meta deal as similar. There's a lot of demand for compute, and not everything can be served by these smaller players. And again, Liz, when you talk about the kind of investment that's required for gigawatt scale, these are for serious companies with muscle, SpaceX, Meta, and of course, SoftBank, which is why we're doing SoftBank Neo. [00:03:48] Speaker 1: You at Arm, when you wear your Arm hat, are in a quiet period. You'll be reporting earnings when? [00:03:54] Rene Haas: A few weeks. [00:03:55] Speaker 1: Okay, a few weeks. So you can't talk specifics. But you made the huge announcement that you are already manufacturing CPU chips, and that you have a deal with Meta. I mean, what about the competitive aspects of SoftBank, which is your largest shareholder at Arm, trying to do a NeoCloud [00:04:15] Rene Haas: business, and Meta doing a NeoCloud business? You know, the Venn diagram of the intersection of all the companies and whether providers, financing, capital, it's a complex world. Everyone needs more and more compute. What we have learned since we made our announcement, and even before, that CPUs are hot again. And this is really because of agentic AI. Agents require CPUs to do the orchestration, the scheduling, all the heavy lifting to move all those tokens that are being generated by the XPUs or the GPUs. So the CPU renaissance is real, and the timing of our announcement, I think, really evidenced that. [00:04:50] Speaker 1: Well, some would call the Venn diagram circularity. And that hints that there are too many connections within the very tight group that's at the top, where NVIDIA, OpenAI, SoftBank. SoftBank owns 13% shares in OpenAI. SoftBank recently tried to get banks to take out a loan. They wanted to take out a loan using their OpenAI shares, and banks balked at that. They lowered what they wanted to do, and banks still said no. And now those talks have restarted. SoftBank would like $10 billion loan that is against their OpenAI shares. Does anything about this make you a little cautious? [00:05:35] Rene Haas: Again, I'm a bit of an optimist on this point, and primarily because we're seeing the scale of investment required is so large that it requires innovative models, innovative partnership, things we haven't seen before. So the doomers will look at this and say, oh my gosh, this is weird, circular revenue, et cetera, et cetera. But I view it more as creativity matters. That's what you're saying. [00:05:56] Speaker 1: Renee, stand by, because we are about to hear what is going on on the floor of the New York Stock Exchange. 3.33 p.m. and 33 seconds. So they have all these traditions here on the floor of the New York Stock Exchange, and they will start hooping and hollering and cheering because we're heading into a three-day weekend. So just stand by for that. It's going to happen in a second. All right, I do want to ask you about robotics. SoftBank bought ABB outright for more than $5 billion. And Massa Song, your chief, has come out and said, robotics, that business is going to be the biggest in the world for SoftBank. [00:06:37] Rene Haas: That's a pretty bold statement. Very bold. I think the whooping is for the robots we're about to hear. Physical AI, in terms of what robots can enable, you know, in the SoftBank portfolio, Liz, there's probably over a hundred different robot configurations, hands, arms, limbs, humanoids. The kind of work that they can do are not only going to supplant what humans can do, but in some cases think work that humans can do. For example, these new data centers have such high voltages running on the back planes that it takes a very special electrician to be able to work with them or they get electrocuted. Great spot for robots. So the growth is going to be immense. [00:07:13] Speaker 1: Oh, that is, that I like. We don't want our electricians electrocuted. [00:07:17] Rene Haas: Go put the robots in the line of harm. [00:07:20] Speaker 1: Just before we go, memory shortage. Sanjay Mehrotra of Micron told us it will go through 2026 and now 2027. How is it affecting anything that you do? [00:07:33] Rene Haas: There's no question it has an impact. I agree with Sanjay, one of our great partners, by the way. Arm works very closely with Micron. It's going to have an impact for everyone, whether it's consumer devices and the data center, because frankly, all these modern devices need memory. And AI in particular is a real hog for memory. When you think about the context, remembering your conversations. People like to use these tools because, oh, it remembers what I did. That's all memory. And that's not only DRAM or HVM, but it's NAND storage. It's everything. So, yes, I think it's a very real issue. I think we're going to feel it for the next number of years. We've had memory shortages before in our industry, as you well know, but this one's very real. [00:08:12] Speaker 1: As we finish up, America 250. A lot of people don't know your backstory, where your folks came from, and the American dream that you're living right now. It's the CEO of one of the biggest companies in America. [00:08:24] Rene Haas: Yeah. You know, I'm like many Americans. I'm a first-generation immigrant. My father born in Germany, grew up in Portugal. My mother was Portuguese. They came to the U.S. just before I was born. And they became U.S. citizens not too far after they arrived here. So, actually, I'm not talking about 30 years, but they made the plunge. And they were very, very proud of this [00:08:46] Speaker 1: day. They were proud to be Americans. Well, they should be proud of you. And, yes, proud of America. Thank you. Thank you. Rene Haas of Arm and SoftBank.