SoftBank Group Corp. founder Masayoshi Son declared in an emotional meeting with investors that he will go back on the offensive in tech investing soon, seeking to establish his credentials in the burgeoning field of artificial intelligence.
(Bloomberg) — SoftBank Group Corp. founder Masayoshi Son declared in an emotional meeting with investors that he will go back on the offensive in tech investing soon, seeking to establish his credentials in the burgeoning field of artificial intelligence.
The billionaire is ending years of dormancy after his Vision Fund, the world’s largest pool of tech capital, racked up billions of dollars of losses as a Covid-era internet boom withered and a global economic downturn sapped valuations.
“Since October, I’ve been asking myself how many years I have left,” the 65-year-old chief executive told shareholders at an annual meeting. “There were times when I felt so empty. ‘Is this enough? Is this it?’ I cried and cried and couldn’t stop crying for days.”
Son, who made one of the most lucrative bets in startup investing history when he financed Jack Ma and Alibaba Group Holding Ltd., seeks to leave a legacy comparable to that of Apple Inc.’s Steve Jobs. The Vision Fund, launched in 2017, was a chance to do so, but high-profile misses such as WeWork Inc. sullied his reputation. Tapping the revolutionary potential of AI tech offers a chance for redemption.
“I wanted to become an architect to build the future of humankind. I may not achieve everything — I myself as an individual may not be enough — but I want to play a role, to an extent, somehow,” he said Wednesday. “The time has come to shift to offense mode.”
SoftBank hit the brakes on new investments and switched to playing defense last year – when Son handed operational duties to Chief Financial Officer Yoshimitsu Goto. The CEO then said he’d made mistakes by getting carried away with excitement about new technology and companies, ignoring good advice from within SoftBank.
On Wednesday, after five straight quarters of Vision Fund losses, the same feverish optimism was apparent in the way Son spoke of AI as the foundational element of future society.
“When your grandkids are our age, I believe they will be living in a reality where the computer is 10,000 times smarter than the sum of all human wisdom,” he said. Son said he intends to keep running SoftBank and has found no successor. “I’m having too much fun.”
The Vision Fund’s return to the field is welcome news for a startup ecosystem whose largest players from Uber Technologies Inc. to Coupang Inc. scaled up thanks to steady financing from the Japanese firm. SoftBank’s signature portfolio firm is now Arm Ltd., the British chip designer Son argues is central to AI. Arm’s now on track for one of the largest initial public offerings this year.
Thanks to its long hibernation, SoftBank now has enough cash on hand to invest again, Son said. Arm is at the beginning of an “explosive” period of growth, he said, adding that he’s spent the last few years doubling the number of the unit’s engineers.
SoftBank’s shares closed up 3.7% after the meeting. The stock has gained more than 30% in the June quarter, heading for its best quarterly performance in three years.
SoftBank is arguably already the world’s largest AI investor, and the use of AI would help its Japan businesses in search, messaging and payments, said Richard Kaye, a portfolio manager at Comgest Asset Management, a long-time investor in SoftBank. “People have just been looking out for buybacks…but the SoftBank story is so much more than that.”
Prospects for Arm’s initial public offering have brightened recently, buoyed by hype around generative AI and talks with potential anchor investors including Intel Corp. Arm is seeking to raise as much as $10 billion, Bloomberg News reported, and brokerages are revising up their SoftBank stock price targets.
Shareholders approved the appointment of Arm CEO Rene Haas to SoftBank’s board to replace outgoing director Kentaro Kawabe, chairman of SoftBank’s Japanese search engine operator Z Holdings Corp.
One of Son’s bigger missteps might be his decision to sell SoftBank’s stake in US chipmaker Nvidia Corp. for $3.6 billion in early 2019. That roughly 5% stake would be worth more than $50 billion now. But the CEO, who survived the dot-com bust, jokes that even the Vision Fund’s losses are “within the margin of error.”
Of the roughly 500 companies SoftBank has invested in, several have the potential to hit valuations of a billion dollars or more, Son said. “If you have one or two smash hits, they will make up for all the mistakes.”
(Updates with CEO and investor comments)
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