However, replicating Arm's success with SoftBank's startup investments has been challenging. The Vision Funds, which have invested in companies like Uber and ByteDance, made $4 billion in gains over the past three months but have a cumulative loss of $2 billion as of December 31. Despite this, SoftBank is optimistic about reversing this position, with its portfolio companies integrating AI and seeking new investment opportunities in the AI sector. Arm and the Vision Funds now represent 70% of SoftBank’s net asset value, up from 21% at the end of 2019.
Key takeaways:
- Masayoshi Son, the SoftBank chief, has shifted his focus from Alibaba to artificial intelligence (AI), with the belief that AI will be more intelligent than humans.
- SoftBank's efforts in AI rest on two pillars: its $32 billion acquisition of chip designer Arm, and the formation of the world’s largest venture capital investment vehicles, the Vision Funds.
- Arm, which SoftBank still owns a 90% stake in, enjoyed a successful Nasdaq listing and reported a 14% year-on-year increase in revenue to $824 million for the quarter, sending its value close to a record high of $117 billion.
- Despite the Vision Funds making $4 billion in gains over the past three months, markdowns on over-valued companies and limited exit opportunities have left them with a cumulative loss of $2 billion as of December 31, but SoftBank is confident about reversing this situation.