“He Spent $140 Billion on AI With Little to Show. Now He Is Trying Again. Billionaire Masayoshi Son Said He Would Make SoftBank ‘the Investment Company for the AI Revolution’, but He Missed out on the Most Recent Frenzy”, 2023-07-03 (; backlinks):
[Matt Levine: “Today the Wall Street Journal has a funny and rather cruel story about how SoftBank Group went all-in on artificial intelligence in 2018, invested $140 billion in the theme, and somehow … missed it … entirely?”]
…The AI wave that has jolted up numerous tech stocks has also had little effect on SoftBank’s portfolio of publicly traded tech stocks it backed as startups—36 companies including DoorDash and South Korean e-commerce company Coupang.
…SoftBank missed out on huge gains at AI-focused chip maker Nvidia: The Tokyo-based investor put around $4.87$42017 billion into the company in 2017, only to sell its shares in 2019. Nvidia stock is up about 10× since.
…Part of the problem was timing: For most of the 6 years since Masayoshi Son raised the first $121.78$1002017 billion Vision Fund, pickings were slim for generative AI companies, which tended to be smaller or earlier in development than the type of startup SoftBank typically backs. In early 2022, SoftBank nearly completely halted investing in startups when the tech sector was in the midst of a chill and SoftBank was hit with record losses. It was then that a set of buzzy generative AI companies raised funds and the sector began to gain steam among investors. Later in the year, OpenAI released ChatGPT, causing the simmering interest in the area to boil over. SoftBank’s competitors have spent recent months showering AI startups with funding, leading to a wide surge in valuations to the point where many venture investors warn of a growing bubble for anyone entering the space.
…During the years that SoftBank was investing, it generally avoided companies focused specifically on developing AI technology. Instead, it poured money into companies that Son said were leveraging AI and would benefit from its growth. For example, it put billions of dollars into numerous self-driving car tech companies, which tend to use AI to help learn how humans drive and react to objects on the road. Son told investors that AI would power huge expansions at numerous companies where, years later, the benefits are unclear or nonexistent. In 2018, he highlighted AI at real-estate agency Compass, now-bankrupt construction company Katerra, and office-rental company WeWork, which he said would use AI to analyze how people communicate and then sell them products.