SoftBank counter-offensive: investment potential in AI
In the wake of a mass restructure of its investments, SoftBank CEO Masayoshi Son says he sees an opportunity to invest in artificial intelligence (AI) and that the tech investment conglomerate is going to shift from defence to offence mode.
Son recently spoke about the potential of AI demonstrated by the launch of OpenAI’s ChatGPT, describing CEO Sam Altman as “one of the key people on Earth,” as reported by The Financial Times. Now, the CEO is ready to capitalise on the AI boom and is betting on the technology to going forward.
What does an investment restructure mean for Asia?
SoftBank has become a leading player in the fintech investment space, making VC investments in companies including WeWork, Uber and Grab. The SoftBank Vision Fund is the world’s largest tech-focused VC fund, with more than US$100bn in capital.
In 2019, Vision Fund suffered a massive US$8.9bn loss, its first quarterly loss in 14 years. As reported by The Financial Times, Softbank’s Vision Funds incurred heavy losses in recent years. Following this, the tech conglomerate halted new investments and used almost all of its shares in Chinese ecommerce group Alibaba for financing.
The company restructured its fund operations, focusing on supporting the growth of existing portfolio companies and recouping capital. It has also sold and monetised assets, raising US$35.4bn last fiscal year through using its shares in Alibaba Group Holding.’
Consequently, the group is now sitting on more than ¥5tn (US$35bn), although SoftBank recorded a net loss of US$6.9bn for the fiscal year ending in March 2023.
Chris Lee, an investment partner for Asia at SoftBank Investment Advisers, has stated that the company is seeing the funding structure change. As quoted by The Banker, he said: “While investor valuation expectations have declined, Asia is largely still enjoying strong underlying operating performance. To bridge the gap, we are seeing increased activity in structured equity or convertible instruments.
“International interest also remains high and emerging markets in Asia continue to showcase strong underlying growth which we believe is a differentiator. As we look ahead, Asian fintechs will need to demonstrate the ability to achieve both growth and profitability.”
Masayoshi Son: AI will supercharge human ability
SoftBank CEO Masayoshi Son has indicated that he believes the firm will be a winner in the AI race thanks to its investments, predicting at an annual shareholder meeting that AI will supercharge human ability.
Despite previous record losses, Masayoshi Son is keen to convey the sense that the company is now on the ‘offensive’ concerning investments in Asia. He states that AI will be a huge part of that, stating that the latest generative-AI technology could multiply human intelligence thousands of times over, with AI-powered robots replacing humans for many tasks.
It has yet to be seen how his words will impact the company in relation to Asian markets, but AI itself has great potential across these markets. India and China are already global centres for technology, with generative AI perhaps being an economic opportunity for further growth.
