The visionary at the head of Softbank made money on both Alibaba and Nvidia. Aiming for tomorrow’s world – News List

Masayoshi Son is the main character and director of the Japanese investment bank Softbank. He is not afraid to take risks, which bring his company billions in profits, but also losses. For example, he was one of the first to notice the potential of Alibaba, in which he invested millions as early as 2000. In the same year, he bought 5 percent of the world’s largest chip manufacturer, NVIDIA. But it can also make billions of dollars, as in the case of WeWork, on which it lost 330 billion crowns.

His technology fund Softbank Vision Fund is backed by Arab sheikhs. Two weeks ago, he invested 500 million dollars in the second most valuable technology startup in the world – Open AI. It also proved to its shareholders that it was Softbank that had an architectural plan to take advantage of a future influenced by artificial intelligence.

“To be a leader in this field and to be able to participate in the fight for the best model of general artificial intelligence, you need both access to hardware and the best talent in the t -world. This combination is available with a few players such as Anthropic or Open AI,” said artificial intelligence expert from CTU and Recombee for SZ Byznys Pavel Kordik.

Just want to invest Open AI Softbank is betting on Son in building the future. According to him, this should be explained in particular by the artificial intelligence of generation, i.e. AI capable of surpassing people in all intellectual tasks. But the question remains, according to experts, how far humanity is from solving all the related requirements to bring “artificial intelligence” to the market.

“Five years ago, when journalists asked me when we could expect next-generation AI, I told them five years. I wasn’t wrong. We are reaching a stage where large language models will be able to learn from their own mistakes, solve tasks independently and approximate the functioning of the human brain. The decisive factor will be when we implement them and whether the market is ready for them,” explained Kordík.

According to Softbank’s investment history, Son is ready for anything at any time. His reputation as a visionary attracts the richest players. When he founded the technology fund “SoftBank Vision Fund” in 2017, which focuses mainly on investments in artificial intelligence technologies, he had an initial capital of 100 billion dollars. Of this, 60 billion was donated by sheikhs from Saudi Arabia and the United Arab Emirates. This fund is also behind the transformation from a bank founded in 1981 by 24-year-old Masayoshi Son to an investment giant in the artificial intelligence sector.

“Through the Vision Fund, SoftBank now manages more than $140 billion in assets. They invest in established brands such as Alibaba, Uber or OpenAI. They also invest in a whole range of AI-focused startups, including Automation Anywhere, Cato Networks and other companies. Such an investment strategy strongly expresses his confidence in the artificial intelligence sector and its long-term success,” said the Chief Economist of the Roklen Financial Group on the fund’s activity for Byznys SZ. Pavel Peterka.

According to him, the importance of the AI ​​sector from an investment point of view is growing, but there are many bubbles that will burst sooner or later. Financial markets are ruthless in this regard. Even Son, described by the Financial Times as a risk-taking billionaire, knows his stuff. It was his pleasure to invest in risky technological visions that earned him hundreds of billions of dollars in the past, but it cost him more.

The visionary succeeded in 2000, when he invested $20 million in Alibaba, which was only a year old at the time. The company’s shares went up until 2021, and Softbank received billions in income from a million dollar investment. Another successful investment was investing in the world’s largest chip manufacturer, the company NVIDIA.

“In 2017, the bank bought a nearly five percent stake in Nvidia, which it sold in 2019. It made a good profit on this investment. However, over the past five years, NVIDIA stock has appreciated 29 times. So Softbank logically prepared itself for the majority of this income by leaving early,” explained the chief economist of Cyrrus to SZ Byznys. Thomas Pfeiler.

But Masayoshi doesn’t look back. His bank has invested in chip manufacturer Arm, which they want to compete with NVIDIA in this field. The British manufacturer is seen by the CEO of Softbank Group as a key element for its future architecture. Large AI models run on CPUs. According to Kordík, however, Arm has little chance to compete with the global hegemon, i.e. NVIDIA, in this area.

“I don’t want to discredit Softbank or ARM, but if you look at where the best money and people are in the business, it’s NVIDIA. “I don’t think that Softbank and ARM will come out of this fight as losers, they will grab a piece of the pie, but they will certainly not back down from the American manufacturer,” he said. .

The investment bank expects to grab a big piece of the pie. When the Vision Fund was established, the investment in Arm was one of the main companies in which Japanese banks and Arab sheikhs invested tens of billions.

But it didn’t all pay off for the visionary with a multi-billion dollar budget. Mac, with some exaggeration, does not look too much at numbers. He looks for big shots and sometimes gets burned. This happened in the case of WeWork, a startup that built shared workspaces. The bank invested in 2019. As a result of the collapse of the startup the bank brought a cumulative loss of 330 billion crowns.

“Softbank invested about $14 billion in WeWork stock, which lost eighty-nine percent of its value in two years. After such a difficult period, restructuring and at least a temporary change of strategy had to come. Softbank has shifted its focus to established and sustainable AI companies. The move was also accompanied by the sale of part of the assets and investments worth more than 20 billion dollars,” Peterka explained the changes in the company.

According to the economist, the strategy of investing heavily in a lot of start-ups, which Mac applied, may make sense, but in such a case, the investor must count on the fact that the big one will fail -some startups. A small part of them, on the other hand, can become another unicorn and thus rapidly increase the value of the money invested.

“This strategy can be assessed as a risk, even in the context of a business where long-term success is expected. We don’t know when success will come, how many corrections there will be in the market and in which direction the real winners will go in the end,” he said. According to him, despite the wild approach in terms of investments, Mac is still on the horse.

“The value of Softbank shares after restructuring does not reach the highest levels since 2021, when they exceeded 10,600 Japanese yen (CZK 1,650, red note.) per category. Now Softbank shares are trading around 9,500 Japanese yen (CZK 1,470,). red note.). If the AI ​​and technology industries succeed and there is no major problem in the Japanese or global economy, Softbank’s good position can be maintained. But there are always risks, and correction will come to all markets after growth,” the economist predicts.