Preferred Networks Plans IPO to Finance Mass Production of AI Chips

Preferred Networks Inc., a Tokyo-based AI-chip startup valued at roughly one billion dollars, announced that it will consider an initial public offering within the next few years. Chief Executive Officer Daisuke Okanohara explained that the move reverses a long-standing policy of engineering independence, as the capital required to scale semiconductor manufacturing now exceeds what existing investors—including Toyota Motor Corp. and Fanuc Corp.—can provide. The company aims to use IPO proceeds to meet the “huge capital needs” of its semiconductor business and to secure production capacity at foundries.

Bloomberg

For about a decade, Preferred Networks has focused on custom-design chips for AI inference, but its products have largely remained in research labs. The global AI hardware market is dominated by Nvidia Corp., and recent shortages of key components have heightened competition for foundry slots. Okanohara highlighted that customers worldwide are seeking alternatives to reduce procurement costs and dependence on U.S. suppliers, especially after the U.S. government’s temporary ban on foreign nationals accessing Anthropic’s Claude models earlier this year.

Bloomberg

The firm plans to deliver samples of its newest MN-Core L series chips to customers in the first half of next year, with a commercial launch to corporate clients—both domestic and overseas—targeted for December 2027. Okanohara noted that the chips, built on a legacy node at Taiwan Semiconductor Manufacturing Co. (TSMC), are designed for low-latency generative-AI inference in devices and robots. He emphasized that the primary risk is not market demand but the ability to produce sufficient volumes.

Bloomberg

Preferred Networks intends to achieve profitability within three years, at which point it expects to be ready for a public listing. The company’s revenue model will shift from research-focused contracts to large-scale sales of AI accelerators, supported by partnerships with Japanese firms such as SoftBank Corp., Sony Group Corp., and Honda Motor Co. through the joint venture Noetra Corp., which is developing a domestic multimodal foundational model.

Bloomberg

If successful, the IPO could bolster Japan’s capacity to offer home-grown AI hardware, reducing reliance on foreign technology and mitigating geopolitical supply-chain risks. The initiative also signals a broader trend among Japanese tech firms to seek public capital as the cost and scale of AI chip production intensify worldwide.

Bloomberg