UPDATE 2-SoftBank's Son is seeking about $100 bln for AI chip venture, Bloomberg reports

(Adds details on investment in paragraph 3, background on Arm in paragraphs 5-7)

Feb 16 (Reuters) - SoftBank Group Chief Executive Officer Masayoshi Son is looking to raise up to $100 billion for a chip venture that will rival Nvidia Corp, Bloomberg News reported on Friday, citing people with knowledge of the matter.

The project, code named Izanagi, will supply semiconductors essential for artificial intelligence (AI), the report added.

The company would inject $30 billion in the project, with an additional $70 billion potentially coming from Middle Eastern institutions, according to the report.

SoftBank did not immediately respond to a Reuters request for comment outside regular business hours.

The Japanese group already holds about a 90% stake in British chip designer Arm, per LSEG.

SoftBank CFO Yoshimitsu Goto said earlier this month that Arm would soon be indispensable to AI and has previously called the chip designer "the core of the core" of SoftBank's group of companies.

Arm executives said earlier this month the company was seeing strong demand for its central processors to complement Nvidia's chips for AI work in data centers.

SoftBank is known for its tech investments with high conviction bets on startups at an unheard of scale.

But it had adopted a defensive strategy after being hit by plummeting valuations in the aftermath of the pandemic, when higher interest rates eroded investor appetite for risk.

It returned to profit for the first time in five quarters earlier this month, as the Japanese tech investment firm was buoyed by an upturn in portfolio companies.

(Reporting by Pritam Biswas in Bengaluru; Additional Reporting by Zaheer Kachwala; Editing by Anil D'Silva and Shinjini Ganguli)