Written by Anton Bridge
TOKYO (Reuters) – Japanese technology investment firm SoftBank Group can leverage its entire $183.6 billion portfolio to build an ecosystem of companies that can embrace artificial intelligence, giving it an advantage over smaller rivals. A top official said on Monday that he is confident there will be.
Navneet Govil, chief financial officer of SoftBank's Vision Fund Investments, said: “The scale of our platform allows us to help these companies understand how they can use generative AI and LLM (Large-Scale Language Models). You can see if it's available.” he said in an interview with Reuters.
“With 477 portfolio companies, you can drive synergies, but with a smaller platform you can't do that,” he said.
The Vision Fund has changed the world of venture capital by making high-conviction bets on startups like ride-hailing app Uber and shared office provider WeWork, but rising interest rates and political instability will see growth startups fall in 2022. The valuation of the company fell and it was a big hit.
Govil said the Vision Fund has not yet made investment decisions based on potential partnerships with specific companies' AI ecosystems. The fund measures the returns generated by introducing portfolio companies to each other as customers and suppliers, and by entering new markets, particularly Japan.
Vision Fund has brought 50 of its 477 portfolio companies to Japan, which would not have been possible had it acted alone, Govil said.
SoftBank has invested in a relatively small number of additional companies in recent years. Starting in 2022, tech company valuations plummeted and investment losses hit record levels, forcing the company to scale back new investments and adopt stricter standards.
Together, the group and Vision Fund have invested about $4 billion over the past two years.
Over the past few years, Vision Fund investments alone have been around $20 billion a year.
But the $4 billion a year is still larger than other funds that also invest in technology startups, Govil said.
(Reporting by Anton Bridge; Editing by Michael Ehrman)