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SoftBank Unveils $3.4 Billion Share Buyback in Search for AI Deals

SoftBank Unveils $3.4 Billion Share Buyback in Search for AI Deals

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SoftBank Group Corp., under the leadership of its enigmatic founder and CEO, Masayoshi Son, has announced a significant share buyback program worth up to ¥500 billion ($3.4 billion). This move comes at a critical juncture as the Tokyo-based tech giant prepares to ramp up investments in artificial intelligence (AI) and semiconductor technologies. The buyback, which will extend through August 7 of next year, aims to repurchase up to 6.8% of the company’s free-floating shares, demonstrating SoftBank’s commitment to bolstering its share price while keeping a robust cash reserve for future strategic investments.

SoftBank Unveils $3.4 Billion Share Buyback in Search for AI Deals

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The announcement follows the increased stake of activist investor Elliott Investment Management in SoftBank earlier this year, which was accompanied by a push for a more substantial $15 billion buyback. Despite this, SoftBank’s Chief Financial Officer Yoshimitsu Goto emphasized that Elliott’s influence had no bearing on the company’s decision, framing the move as a natural evolution of SoftBank’s financial strategy.

AI and Semiconductors: The New Frontier

Masayoshi Son has long been known for his visionary approach to technology investment, and the current buyback signals SoftBank’s readiness to dive deeper into AI and semiconductor sectors. The value of SoftBank’s assets, excluding debt, has surged in tandem with the rising share price of its chip affiliate Arm Holdings Plc. Goto pointed out that SoftBank’s net asset value has skyrocketed to ¥35.3 trillion, with its loan-to-asset value plummeting to a mere 7.8%, well below its historical target of 25%. This financial strength positions SoftBank to aggressively pursue new opportunities in AI chips, data centers, and robotics—areas that Goto says will be central to SoftBank’s future growth.

The timing of this buyback is also noteworthy, given the company’s volatile stock performance in recent days. After suffering its largest drop since 1998 on Monday, SoftBank’s stock partially recovered on Tuesday and Wednesday. However, its market value remains down more than $40 billion from the peak it reached in July. 

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Analysts, such as Kirk Boodry from Astris Advisory, suggest that while the ¥500 billion buyback might seem modest compared to past programs, it should generate some excitement among investors. This buyback, combined with an anticipated accelerated AI investment strategy, underscores Son’s unwavering focus on realizing what he describes as “artificial super-intelligence” while maintaining a solid financial foundation for SoftBank’s ambitious future.

SoftBank Invests in AI Startup Perplexity at $3 Billion Value

SoftBank Invests in AI Startup Perplexity at $3 Billion Value

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SoftBank Group Corp.’s Vision Fund 2 is making a significant investment in US-based artificial intelligence startup Perplexity AI, valuing the company at $3 billion. This latest move by SoftBank’s founder, Masayoshi Son, underscores his commitment to the AI sector, which he views as vital for securing his legacy. According to sources familiar with the matter, SoftBank will invest between $10 million and $20 million in Perplexity as part of a larger $250 million funding round. This infusion of capital triples Perplexity’s valuation, positioning it as one of the industry’s most highly valued companies.

SoftBank Invests in AI Startup Perplexity at $3 Billion Value

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The deal highlights SoftBank’s strategy to accelerate its investments in AI. Recently, Son shared an ambitious vision for the future of AI, which includes developing “artificial super intelligence” (ASI), an AI system thousands of times smarter than any human. Speaking at an annual shareholders meeting, Son emphasized, “We’ve done many things, but all that’s been a warmup for my dream to realize ASI. This is what I was born to do.”

While the deal is not yet finalized and the terms could change, representatives for Perplexity and SoftBank have declined to comment on the ongoing discussions. Some details of the broader financing were initially reported by TechCrunch.

Strategic Partnerships and Controversies

SoftBank’s equity investment also reinforces an existing business relationship with Perplexity. Earlier this year, Perplexity announced a partnership to offer SoftBank’s Japanese wireless customers a free one-year subscription to its service. This collaboration has strengthened Perplexity’s presence in Japan, a significant market for the company.

Perplexity, established less than two years ago, has set itself apart from other AI chatbots by delivering more real-time information. Although primarily a search service, Perplexity describes itself as an “answer engine” that provides text-based results instead of traditional links. However, the startup has faced controversy regarding a product that summarizes news stories, raising questions about whether it adequately credits original news outlets.

SoftBank is expected to further intensify its focus on AI services. According to a Bloomberg report in February, SoftBank is planning to invest around $100 billion into AI-related chips under a project named Izanagi. When asked about Izanagi at the recent shareholders meeting, Son expressed his commitment to achieving tangible results but did not provide additional details.

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In addition to Perplexity, SoftBank has been actively investing in other AI ventures. This year, the company invested $200 million directly into Tempus AI, a startup that analyzes medical data to improve treatment options for doctors and patients. They also plan to establish a ¥30 billion ($187 million) joint venture to offer similar services in Japan. Son explained his rationale for supporting Tempus during his recent address to shareholders, emphasizing his dedication to advancing AI technology.

SoftBank's Arm Plans to Launch AI Chips Next Year Amid Huge Global Demand

SoftBank’s Arm Plans to Launch AI Chips Next Year Amid Huge Global Demand

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Arm, the chip designer owned by SoftBank Group, is gearing up to enter the artificial intelligence chip market with plans to launch its own AI chips by next year. The move comes amidst a heated competition in the AI chip sector, as companies race to dominate this rapidly growing market.

Setting Up an AI Chip Unit

According to a recent report by Nikkei Asia, Arm, which has a 90% stake owned by SoftBank, is in the process of establishing an AI chip unit. This unit is tasked with developing a prototype AI chip, expected to be ready by the spring of 2025. The intention is to initiate mass production by the fall of the same year.

Partnerships and Investments

SoftBank's Arm Plans to Launch AI Chips Next Year Amid Huge Global Demand

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Arm is engaging in discussions with prominent contract manufacturers, including Taiwan’s TSMC, to facilitate the production of these AI chips. The initial investment for developing these chips is projected to be substantial, potentially reaching hundreds of billions of yen. However, Arm intends to absorb these development costs, highlighting the strategic importance of this venture for both Arm and SoftBank.

Strategic Moves and Future Plans

Arm’s foray into the AI chip market underscores SoftBank’s strategic focus on artificial intelligence. Masayoshi Son, the Japanese billionaire leading SoftBank, has expressed a strong commitment to AI investments. This includes a planned investment of $960 million by next year to enhance computing facilities for generative AI.

Moreover, SoftBank envisions a broader presence in the AI landscape. It aims to establish AI data centers powered by its proprietary chips across key regions like the U.S., Europe, Asia, and the Middle East by 2026. This ambitious plan signals SoftBank’s determination to be at the forefront of the AI revolution.

Also Read: Apple and OpenAI Close In on Agreement to Integrate ChatGPT into iPhones

Market Response and Financial Outlook

Arm’s announcement has already resonated positively in the market, with its shares rising by nearly 45% this year. As of current data, Arm’s market capitalization exceeds $113 billion, a testament to investor confidence in its strategic direction.

SoftBank is scheduled to report its fiscal year earnings on Monday, providing further insights into its financial health and strategic initiatives. The upcoming launch of Arm’s AI chips and SoftBank’s continued investments in AI infrastructure are poised to shape the future landscape of the tech industry, particularly in the realm of artificial intelligence.

Wayve secures $1B from SoftBank, Microsoft, and NVIDIA to build AI for self-driving cars

Wayve Secures $1Billion from SoftBank, Microsoft, and NVIDIA to Build AI for Self-Driving Cars

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In the fast-evolving landscape of autonomous driving technology, Wayve, a British unicorn, has recently made headlines by securing a monumental $1 billion investment from industry giants SoftBank, Microsoft, and NVIDIA. This substantial funding is not only a testament to Wayve’s potential but also reflects the booming growth of the UK’s self-driving vehicle and AI sectors.

UK's Booming Self-Driving Vehicle Sector

Wayve secures $1B from SoftBank, Microsoft, and NVIDIA to build AI for self-driving cars

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Between 2018 and 2022, the UK self-driving vehicle sector saw a significant influx of £475 million in direct investment, creating 1,500 new jobs. Projections indicate that by 2035, this sector could be worth a staggering £42 billion, generating an additional 38,000 skilled jobs. Similarly, the AI sector in the UK, which currently employs over 50,000 people, is poised for exponential growth, with forecasts predicting a market value exceeding $1 trillion by 2035.

Embodied AI: Revolutionizing Autonomous Driving

Wayve’s focus on developing Embodied AI for self-driving vehicles represents a paradigm shift in autonomous driving technology. Unlike traditional systems limited by strict patterns and rules, Embodied AI empowers vehicles to learn from and interact with real-world environments dynamically. This includes navigating through unexpected scenarios such as erratic driver behavior or unpredictable pedestrian movements, enhancing safety and efficiency on the road.

Wayve's Pioneering Efforts

Founded in 2017, Wayve has been at the forefront of AV2.0 development, pioneering end-to-end AI autonomous driving systems tested on public roads. The company’s success has been bolstered by the UK’s forward-thinking regulatory frameworks, such as the Code of Practice: Automated Vehicle Trialling, fostering innovation and safety in self-driving technology.

UK's Automated Vehicles Bill: A Catalyst for Innovation

Wayve’s substantial investment aligns with the imminent passage of the UK’s Automated Vehicles Bill, designed to facilitate the safe deployment of self-driving vehicles. This comprehensive legal framework ensures rigorous safety testing for autonomous vehicles, clarifies legal liabilities, and sets the stage for a transport revolution that prioritizes safety, convenience, and accessibility.

Government and Industry Support

Leadership figures like Prime Minister Rishi Sunak and Secretary of State for Science, Innovation, and Technology, Michelle Donelan, have hailed Wayve’s achievement as a testament to the UK’s prowess in AI and innovation. This massive investment not only bolsters Wayve’s global expansion but also solidifies the UK’s position as a hub for cutting-edge AI solutions in self-driving technology.

Wayve’s groundbreaking investment underscores the immense potential of AI-driven autonomous vehicles in reshaping transportation and safety standards. With strong government support and industry collaboration, the UK is poised to lead the charge in revolutionizing the future of self-driving cars, setting new benchmarks for innovation and economic growth.

SoftBank’s Vision Fund Reports Another Loss of $1.7 Billion

SoftBank’s Vision Fund Reports Another Loss of $1.7 Billion

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SoftBank Group Corp.’s Vision Fund faced a setback as it reported a loss of $1.7 billion, attributing the decline to lower valuations at WeWork Inc. and other portfolio companies. The Vision Fund segment saw a loss of $1.7 billion through September, marking continued challenges for Masayoshi Son’s ambitious investment strategy.

SoftBank's Struggle Amidst Valuation Drops

The Vision Fund’s losses were exacerbated by declines in the value of holdings, including SenseTime Group Inc., AutoStore Holdings Ltd., and Symbotic. WeWork, a notable investment, contributed to the red ink, with cumulative losses of $14.2 billion through September, a figure that may rise further due to WeWork’s recent bankruptcy filing.

SoftBank’s Vision Fund Reports Another Loss of $1.7 Billion

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The ongoing losses raise questions about SoftBank’s assertion that the worst is behind the Vision Fund, which injected over $140 billion into numerous money-losing startups globally. Analysts express skepticism, noting the lack of visibility into the majority of the Vision Fund’s unlisted portfolio companies.

SoftBank Group, as a whole, reported a net loss of ¥931.1 billion, in stark contrast to the ¥3 trillion profit the previous year. The company is grappling with the aftermath of the Vision Fund’s $53 billion losses in the last two years. Despite challenges, Chief Financial Officer Yoshimitsu Goto emphasized positive aspects, highlighting the increased value of Arm and assets worth over $29 billion in SoftBank’s portfolio.

Goto indicated that SoftBank is in an investment phase, with a focus on autonomy in transportation and logistics. The company invested $1.5 billion in the September quarter and $1.8 billion the quarter before. Founder Masayoshi Son’s recent bets on autonomous technologies include investments in autonomous trucking startup Stack AV and an AI-driven warehousing joint venture with Symbotic Inc.

Concerns and Future Prospects

Analysts remain cautious, citing disappointing investment returns and management’s reluctance to repurchase shares. SoftBank’s strategic shift towards direct investments, bypassing the Vision Fund, adds complexity to its future endeavors. The company faces challenges in a landscape shaped by China’s tech crackdown and global economic uncertainties.

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SoftBank, despite the setbacks, expressed optimism about its investment in AI-related firms. The company sees potential value in assets like TikTok parent ByteDance Ltd., Fanatics Inc., and PayPay Corp. Goto highlighted the Vision Fund’s positive returns in the latest quarter, although analysts remain skeptical, questioning the absence of share buybacks.

In conclusion, SoftBank navigates a complex terrain, balancing losses from past investments with a renewed focus on emerging technologies and direct investment strategies. The company’s ability to rebound and deliver shareholder value remains uncertain amidst evolving market dynamics.

Softbank-backed Arm raises $4.87 billion at $51 per share in biggest IPO of 2023

Softbank-backed Arm raises $4.87 billion at $51 per share in biggest IPO of 2023

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Seven years after SoftBank Group Corporation, the business’s owner, purchased Arm Holdings Plc for a price of 32 billion dollars, Arm Holdings obtained a 54.5 billion dollar estimate in its United States initial public offering (IPO) on Wednesday.

The estimated value of the company has dropped from the 64 billion dollars at which SoftBank last month purchased the 25 percent share it did not yet control in the business from the one hundred billion Vision Fund it oversees.

Even with this reduced cost, SoftBank still performs far better than its forty billion-dollar agreement to hand over Arm to Nvidia Corp, which it abandoned last year due to resistance from antitrust regulators.

According to the company’s announcement on Wednesday, Arm raised 4.87 billion dollars for SoftBank through the sale of 95.5 million stocks at a cost of 51 dollars per share, which was the top of its suggested range. The announcement of Arm’s valuing decision was originally made by Reuters.

On Thursday, shares of Arm are expected to begin trading in New York.

Numerous of Arm’s top clients have already agreed to participate as cornerstone investors in the company’s first public offering, which includes Apple, Alphabet, Nvidia, Advanced Micro Devices, Intel, as well as Samsung Electronics.

In an IPO, Arm secured enough support from financiers, according to Reuters, to guarantee at least the high end of the price spectrum between $47 and $51 per share, with the chance that the sale of shares would be priced above range.

Arm started advertising its IPO this week in an effort to persuade investors that it has growth opportunities outside of the mobile phone sector, which it now holds a 99 percent share of.

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Arm’s sales have been flat since the global economy has been slowing down due to weak smartphone demand. In comparison to the previous year’s 2.7 billion dollars in revenue, the total for the 12 months ending in March was a price of $2.68 billion.

The cloud computing marketplace, of which Arm only holds a ten percent stake and thus has further room for growth, is anticipated to increase at a yearly pace of 17 percent through 2025, in part because of developments in artificial intelligence, Arm said interested parties in New York last Thursday. It is anticipated that the automobile market, which currently controls forty-one percent of global sales, will rise by 16 percent while the mobile sector is only anticipated to grow by six percent.