Is This Billionaire's Big Move The Future Of AI?

Billionaire and SoftBank CEO Masayoshi Son, a visionary always on the lookout for his next big investment, has set his sights on AI. His latest move, leading SoftBank to acquire Graphcore, a U.K.-based artificial intelligence company, is a potential testament to his foresight. Graphcore, founded in 2016, is dedicated to building IPUs, intelligence processing units, a technology that could shape the future of AI. 

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With the soaring demand for artificial intelligence and the remarkable success of Nvidia NVDA, investors are eagerly anticipating the potential of Graphcore’s IPO. While it’s not yet open for investment, the prospect of it becoming a publicly traded company is on the horizon. SoftBank’s reported acquisition cost of around $600 million, below the $700 million it raised in venture capital, suggests a promising future. Despite Graphcore’s current lack of profitability, the SoftBank acquisition provides the company with the stability to continue developing its pipeline of AI technologies without the constant need for capital. 

The purchase of Graphcore was funded by SoftBank Group itself, not Son's Vision Fund. This decision, made by SoftBank’s more venture capital-focused arm, could be seen as a vote of confidence in Graphcore’s future. The fact that Graphcore was purchased through SoftBank Group, rather than the Vision Fund, may further bolster investor confidence in the company’s potential. Graphcore CEO and co-founder Nigel Toon described the acquisition as a "great outcome for the company," reinforcing the belief in its future.

Speaking at SoftBank's annual shareholder meeting last month, Masayoshi Son made it clear that he is focusing heavily on artificial intelligence. He said he intends to conquer the goal of creating artificial superintelligence (ASI). This concept is the idea that AI can surpass human learning, and he said that "Masayoshi Son was born to make ASI a reality."

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A Mixed Track Record 

Masayoshi Son has been able to spot trends sometimes years before they become a complete reality, but that doesn't mean he's a flawless investor. In fact, SoftBank's Vision Fund invested in Nvidia but sold it in 2019. While the company made a substantial profit of $3.3 billion, it missed out on Nvidia's incredible run-up over the next several years.

However, it may redeem itself with Arm Holdings, which had its IPO less than a year ago and is already up nearly 200%. SoftBank owns 90% of the semiconductor design company and sees the investment as part of its move toward the future of AI. 

It's safe to say that real estate is not a lucky charm for Masayoshi Son. One of Son's most significant errors was falling for the charms of WeWork founder Adam Neumann and investing billions of dollars in the company. The move cost SoftBank a reported $11.5 billion and became a black mark on Son's record. Another real estate-related investment in tech-focused brokerage Compass COMP has not performed as expected. Since its IPO in 2021, the stock is down nearly 80%. SoftBank also invested in Katerra, a startup that was expected to be the future of modular construction. That company flamed out in 2021, filing for bankruptcy before ever going public and taking nearly $3 billion in investor money with it. 

After the Vision Fund posted a record $32 billion loss during its 2022 fiscal year., Son and his team tightened their belts, enacting massive job cuts. But those brutal results don't seem to have dampened Son's enthusiasm for investing. If he's right, the next giant leap in AI is right around the corner. If he's wrong, he risks losing the faith of SoftBank's investors as well as the millions around the world who follow his moves as a way to get a pulse on where the world is headed next. 

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