By Masayoshi Son, the visionary CEO of SoftBank, owes a significant portion of his success to a bold investment in Alibaba during the dot-com era. Son’s early faith in Jack Ma’s ecommerce venture resulted in a staggering $72 billion gain for SoftBank over 23 years. However, recent years have seen Son divest SoftBank’s stake in Alibaba, shifting his focus towards a new frontier: artificial intelligence (AI).
Life After Alibaba
The decision to unwind SoftBank’s investment in Alibaba was prompted by various factors, including concerns over regulatory crackdowns in China and the need for liquidity following significant losses. However, it has paved the way for Son to double down on his long-standing interest in AI. Son has long been a fervent advocate for AI, envisioning a future where it surpasses human intelligence.
AI as the New Focus
SoftBank has transitioned its focus from Alibaba to AI, recognizing the transformative potential of this technology. CFO Yoshimitsu Goto emphasized this shift during SoftBank’s recent earnings report, stating that the company is now fully committed to leading the AI revolution. SoftBank’s AI strategy revolves around two key pillars: the acquisition of chip designer Arm for $32 billion and the establishment of the Vision Funds, the world’s largest venture capital investment vehicles.
Mixed Success and Future Prospects
While SoftBank’s acquisition of Arm has yielded positive results, particularly with the company’s successful IPO and strong financial performance, its venture capital efforts have faced challenges. The Vision Funds, while backed by substantial capital, have encountered difficulties in realizing returns on investments, leading to cumulative losses. However, SoftBank remains optimistic about the future, with its portfolio companies increasingly integrating AI into their operations.
Pursuing AI Opportunities
SoftBank is actively seeking new investment opportunities in companies across the AI spectrum, aiming to identify the next breakthrough in AI technology. Despite not yet investing in major language model players, such as OpenAI, Son has engaged in discussions with industry leaders, indicating his interest in this sector. With Arm and the Vision Funds accounting for a significant portion of SoftBank’s net asset value, Son is banking on these pillars to drive future growth.
Emulating Past Success
To replicate the success of his early investments, Son understands the importance of both Arm and the Vision Funds performing optimally. While Arm shows promise, there is still work to be done to rejuvenate the Vision Funds and position SoftBank as a dominant force in the AI landscape. As Son continues to navigate the ever-evolving tech industry, his bet on AI could shape the future trajectory of SoftBank and redefine the boundaries of technological innovation.