SoftBank's Vision: Masayoshi Son's Strategic Investments in AI

Masayoshi Son's visionary bets at SoftBank often yield remarkable successes and notable failures in the tech investment landscape.

### The Visionary Leadership of SoftBank: Masayoshi Son's Big Bets and Future Moves
* 💼 SoftBank, originally a software distributor for Microsoft, is now synonymous with its founder **Masayoshi Son**, who is recognized as a **true futurist and visionary** in the tech industry.
* 💰 The conglomerate operates through its Vision Funds, where investment decisions ultimately hinge on **Masayoshi Son's instinctive calls**, often leading to both **spectacular successes** and **notable failures**.
* 📈 Notable successes include significant investments in companies like **Alibaba** and the strategic acquisition of **Vodafone Japan**, which has yielded **substantial financial returns**, estimated at around **$40 billion**.
* 🤔 Despite some missteps, such as WeWork and Wag, Son's fascination with AI suggests that SoftBank is poised to make **impactful investments** in this area, with a reported cash reserve of **over $30 billion**.
* 🔍 The strategic acquisition of GraphQL indicates SoftBank's intent to position its ARM division as a competitor to NVIDIA, particularly in the realm of **data centers and energy-efficient chip design**.
* ⚡ Son's previous foresight with smartphones illustrates his ability to **stay ahead of technological trends**, and he is expected to make another **significant move in AI or energy sectors** soon.
* 🌞 SoftBank Energy, a leading solar power generator, could play a **crucial role in addressing the energy demands of data centers**, further emphasizing the company's **strategic direction in sustainable technology**.

Let's start by asking now that the book is written and out. Yeah. What is SoftBank? Well, first of all, thanks for having me. Great to be here. What is SoftBank? I mean, you must know you just wrote a book about the. Well, the name itself is a bank for software and gets back to massage the roots as a software distributor for Microsoft software. And but SoftBank is really about Masayoshi Son and I consider it one of the great privileges of my life to have worked alongside him for a while. You know, kind of fancy titles aside, you know, my role really there was Chief dealmaker in chief, so to speak. And and I think the one thing I would really highlight about him, the standout characteristic is is he's a futurist in the true sense of the word and. And yeah that that that town visionary genius it's it gets thrown around a lot but he's proven it time and time.

It's an interesting point in sort of the mechanics of how SoftBank works, right. It is a conglomerate. Then you have the vision fund part vision fund, one and two. Yeah, each has an investment committee. My point being that ultimately it's still in many senses comes down to Masa making an instinctive call on whether or not to invest in something. Is that what you found? It's more than just instinctive. And the answer is yes. For me at least, SoftBank is all about Masa and the standout thing about SoftBank is he gets the big bets spectacularly, right? I mean, I mean stories like we work that kind of fun amusing. I talk about it too, but nobody's made a movie about about for example, which is just a remarkable success story, right? And we can talk about that. And SoftBank, Japan is a lesser-known low profile. Think it's no reason the US audience or

US investors would be familiar with that. But it's a remarkable story. I mean, you know, people think that Masa has come back in the in the in 2006, 2007. That had to do with Alibaba, and Alibaba was phenomenal. But SoftBank Japan, which is a mobile phone company, Vodafone, was so desperate to get rid of it. They actually lent Masa money to take it off their hands. And you know, he bought that company on the strength of a handshake from Steve Jobs to give him an exclusive for smartphones. And he kind of saw that coming. So he's made these huge bets. And by the way, the Didi's gain on that and a mark-to-market space and basis on SoftBank, Japan, Australia, and Vodafone Japan is to the order of 40 billion on aam. It's 100 billion. So he gets these big bets spectacularly.

but he has got some spectacular misses as well, and that's the VC way. You bet big; some of them hugely pay off, others don't. But there was this moment where money being thrown out, WeWork money being thrown at improbable in the UK, money being thrown at Wag, which went horribly wrong, a dog walking service. What makes the OpenAI potential bet that we're hearing about SoftBank bringing in 500 million. Is that the right one to be throwing money out right now. Well, I'm not sure throwing money is the way I'd describe it. I think you have to keep in mind that in as much as he is, he's been fascinated by, he was talking about this when I first got to know him back in 2014. And I described this in my book, sitting on his porch in his home in Tokyo. And, you know, he was talking obsessively about AI, about singularity, and what it would mean from a technology perspective.

And I honestly, I didn't take him seriously at the time. So it's it's and he's been very clear now. It is I think in June at his AGM he announced that everything we've seen before is a warm-up day. So he's he's ready to make some big moves. And that's a long-winded way of answering your question. I mean, you look at SoftBank and the scale in which it operates. I think it's sitting on certainly north of 30 billion, probably closer to 40 billion in cash. So a I don't I don't think of a 500 million opening as a big bet by SoftBank standards. I think it's a it's it's it's it's sort of being in the game so to speak. I mean, I'm kind of waiting for Son to make his next big move and it will be

big knowing him. That's just that's just the way he rose to what and paint us the vision. Therefore, because we too have heard the thesis, this is why the deal that you helped orchestrate was first the target. But to what end? What does he build eventually? Because sometimes his purchasing with SoftBank, sometimes his purchasing with the VC arm. Well, let's be clear. The first vision fund was a true fund. And as much as it involved third party money, mainly from the Middle East. The other vision funds are on balance sheet. So the subtlety is SoftBank, which is the VC arm. To me it's it's it's not it's not meaningful in that context, right. I mean, so for example, when you read about SoftBank buying GraphQL, my understanding is that's a strategic deal. And what Sonshine intends to do with that in conjunction with with his ownership of arm, you know, I think I

think remains to be seen. But talking about vision again, I mean, I speak as I've been out to SoftBank for five years now, so I'm obviously not an insider, but you know, in terms of what I see, first of all, this arm, arm is, and I don't follow stocks. I'm not a research analyst, so I'm not going to comment on the valuation. But all for me is remarkably well positioned as it moves to the edge of the network. ARM has always been about blueprints for chip design. Energy efficiency has always been their secret sauce. And when you get to the edge, you know, with Apple intelligence and in smartphones and autonomous cars, that gets to be really, really important. I think that, you know, I think the GraphQL acquisition is a signal that, and I think the company has been pretty explicit about it, that arm intends to be a challenger to NVIDIA.

In terms of Nvidia's dominance in datacenters, ARM intends to challenge in video in that regard too, so there's a lot of that going on. My own view of, you know, I do spend a fair bit of time with what we think this is a senior advisor and what they're saying. They've avoided getting into the lambs, but they've been, you know, what they're seeing is very focused on their portfolio and the implications for deploying AI margin improvements. Jensen Huang talked about it in his last earnings release. I mean, he gave the example of Amdocs and a 30% reduction in customer service costs by deploying an agent. So that stuff is very, very real. Let me ask you, saying to end the conversation. Yeah, they were in early and Nvidia SoftBank, but then they got out early. Yeah. Through that, yeah, 500 million in open air may not be big. You said that they will make their next

big bet. How do you know that whole time it right and the in the end with A.I. whatever happens he'll be a part of whatever the conversation we're having. Is what? Because the track record speaks for itself. He's done it over and over again, right? I mean, I think with smartphones, he was at least 2 to 3 years ahead of it. I don't know what his next big move will be, but I do know it's going to be big. And I think he's come out and said it will be something to do with the AI and it may well in particular coming energy is another space by SoftBank. Energy enough money, people get this. But SoftBank Energy is one of the leading solar power generators and that, as we know, is a huge bottleneck in terms of the build-out of these datacenters. I mean, the hugely power-hungry, so could be something in that space, for example.

SoftBank: A Behind-the-Scenes Account

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SoftBank is a conglomerate with roots as a software distributor for Microsoft, founded by Masayoshi Son.

Son is a visionary futurist, known for making instinctive and successful big bets on investments.

The company's structure includes the Vision Fund, but ultimately, Masayoshi Son's decision-making plays a crucial role in SoftBank's investment strategy.

Masa Son's comeback was driven by his acquisition of SoftBank Japan from Vodafone, with a handshake deal from Steve Jobs for smartphone exclusivity.

His big bets have resulted in both spectacular gains and misses, following the typical venture capital strategy.

SoftBank's potential $500 million investment in OpenAI reflects Son's long-standing fascination with AI and its transformative potential.

SoftBank's CEO, Masayoshi Son, is preparing for significant moves, with the company sitting on $30-40 billion in cash.

The recent $500 million opening is seen as a small bet by SoftBank's standards.

The company's vision funds have shifted from third-party money to being on the balance sheet, with Son's strategic purchases, like GraphQL, playing a key role in his overall vision.

ARM's Strategic Shift and Challenge to NVIDIA

ARM is well-positioned to move to the edge of the network, focusing on chip design and energy efficiency, which is crucial for technologies like smartphones and autonomous cars.

The company's acquisition of GraphQL signals its intention to challenge NVIDIA's dominance in data centers.

ARM is focused on deploying AI for margin improvements, aiming to make a significant impact in customer service costs.

The leader has a strong track record of being ahead of the curve, particularly with smartphones.

Their next big move is anticipated to be in the AI space, potentially focusing on energy generation.

SoftBank's involvement in solar power could play a significant role in addressing the energy needs of data centers.