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Tag: Masayoshi Son

  • SoftBank’s Nvidia sale rattles market, raises questions | TechCrunch

    Masayoshi Son isn’t known for half measures. The SoftBank founder’s career has been studded with eyebrow-raising bets, each one seemingly more outrageous than the last.

    His latest move is to cash out his entire $5.8 billion Nvidia stake to go all-in on AI. And while it surprised the business world on Tuesday, it maybe should not. At this point, it’s almost more surprising when the 68-year-old Son doesn’t push his chips to the center of the table.

    Consider that during the late 1990s dot-com bubble, Son’s net worth soared to about $78 billion by February 2000, briefly making him the richest person in the world. Then came the ugly dot-com implosion months later. He lost $70 billion personally – which, at the time, was the largest financial loss by any individual in history — as SoftBank’s market cap plummeted 98% from $180 billion to just $2.5 billion. 

    Amid that terribleness, Son made what would become his most legendary bet: a $20 million investment in Alibaba in 2000, one decided (the story goes) after just a six-minute meeting with Jack Ma. That stake would eventually grow to be worth $150 billion by 2020, transforming him into one of the venture industry’s most celebrated figures and funding his comeback.

    That Alibaba success has often made it harder to see when Son has stayed too long at the table. When Son needed capital to launch his first Vision Fund in 2017, he didn’t hesitate to seek $45 billion from Saudi Arabia’s Public Investment Fund – long before taking Saudi money became acceptable in Silicon Valley.

    After journalist Jamal Khashoggi was murdered in October 2018, Son condemned the killing as “horrific and deeply regrettable” but insisted SoftBank couldn’t “turn our backs on the Saudi people,” maintaining the firm’s commitment to managing the kingdom’s capital. In fact, the Vision Fund actually ramped up dealmaking soon after.

    That didn’t turn out so well.

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    A big bet on Uber generated paper losses for years. Then came WeWork. Son overrode his lieutenants’ objections, fell “in love” with founder Adam Neumann, and assigned the co-working company a dizzying valuation of $47 billion in early 2019 after making several previous investments in the company. But WeWork’s IPO plans collapsed after it published a famously troubling S-1 filing. The company never quite recovered – even after pushing out Neumann and instituting a series of belt-tightening measures – ultimately costing SoftBank $11.5 billion in equity losses and another $2.2 billion in debt. (Son reportedly later called it “a stain on my life.”)

    Son has been mounting another comeback for years, and Tuesday will undoubtedly be remembered as an important moment in his turnaround tale. Indeed, it will likely be recalled as the day SoftBank revealed it had sold all 32.1 million of its Nvidia shares – not to diversify its bets but instead to double down elsewhere, including on a planned $30 billion commitment to OpenAI and to participate (it reportedly hopes) in a $1 trillion AI manufacturing hub in Arizona. 

    If selling that position still gives Son some heartburn, that’s understandable. At about $181.58 per share, SoftBank exited just 14% below Nvidia’s all-time high of $212.19, which is a strong look. That’s remarkably close to peak valuation for such a huge position. Still, the move marks SoftBank’s second complete exit from Nvidia, and the first one was exceedingly costly. (In 2019, SoftBank sold a $4 billion stake in the company for $3.6 billion, shares that would now be worth more than $150 billion.)

    The move also rattled the market. As of this writing, Nvidia shares are down nearly 3% following the disclosure, even as analysts emphasize that the sale “should not be seen as a cautious or negative stance on Nvidia,” but rather reflects SoftBank needing capital for its AI ambitions.

    Wall Street can’t help but wonder: does Son see something right now that others do not? Judging by his track record, maybe — and that ambiguity is all investors have to go on.

    Connie Loizos

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  • After Tension With Washington, Intel Is Suddenly a Hot Asset

    Earlier this month, President Donald Trump publicly called on Intel CEO Lip-Bu Tan to resign. Photo by Andrej Sokolow/picture alliance via Getty Images

    In its latest push into A.I. and semiconductors, SoftBank yesterday (Aug. 18) announced a $2 billion investment in Intel. The Masayoshi Son-led conglomerate purchased shares at a slight discount—$23 each—giving it about a 2 percent stake in the struggling U.S. chipmaker.

    “For more than 50 years, Intel has been a trusted leader in innovation,” said Son in a statement. “This strategic investment reflects our belief that advanced semiconductor manufacturing and supply will further expand in the U.S., with Intel playing a critical role.”

    SoftBank, long known for its bold bets, has been particularly aggressive in A.I. It has backed A.I. startups like Perplexity AI and OpenAI, leading a $40 billion funding round for the latter that valued the ChatGPT maker at $300 billion earlier this year. In January, SoftBank also joined OpenAI, Oracle, and others in launching Stargate, a $500 billion initiative aimed at boosting domestic A.I. development over the next four years.

    On the semiconductor front, SoftBank is the majority owner of chip designer Arm and last year acquired Graphcore to position it as a Nvidia rival.The company previously held around 5 percent of Nvidia but sold its stake in 2019, just before the A.I. boom sent the chipmaker’s value soaring. SoftBank has since rebuilt its Nvidia holdings to around $3 billion.

    While surging demand for A.I. chips has made Nvidia the world’s most valuable publicly listed company, Intel has struggled to capitalize on the boom. Once a leader in semiconductor manufacturing, the Santa Clara, Calif-based company has fallen behind rivals in areas like GPUs. After SoftBank revealed its investment, its own shares dropped more than 7 percent today, while Intel shares jumped 7 percent on the news.

    The U.S. eyes a stake in Intel

    Another force bolstering Intel’s share price today is reports that the U.S. government is considering a 10 percent stake in the company. The government is considering converting funds that Intel was supposed to get under the Biden-era Chips and Science Act into an equity stake, U.S. Commerce Secretary Howard Lutnick told CNBC today.

    The move would add a new twist to the tumultuous relationship between Washington and the semiconductor industry. Earlier this month, President Donald Trump publicly called on Intel CEO Lip-Bu Tan to resign, citing alleged conflicts of interest—a demand he walked back after meeting Tan at the White House last week. In August, the administration also announced that Nvidia and AMD could resume exporting chips to China, but only if they pay the U.S. 15 percent of revenue from those sales.

    Tan, who took over as Intel’s chief executive in March, is focused on catching up with competitors by emphasizing engineering, cutting costs and laying off about 25,000 employees throughout 2025. A veteran of the semiconductor industry, Tan has close ties to Son, having previously served on SoftBank’s board until 2022.

    “We are pleased to deepen our relationship with SoftBank, a company that’s at the forefront of so many areas of emerging technology and innovation and shares our commitment to advancing U.S. technology and manufacturing leadership,” said Tan in a statement. “Masa and I have worked closely together for decades, and I appreciate the confidence he has placed in Intel with this investment.”

    After Tension With Washington, Intel Is Suddenly a Hot Asset

    Alexandra Tremayne-Pengelly

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  • SoftBank’s Vision Fund logs biggest gain in nearly three years as tech valuations recover

    SoftBank’s Vision Fund logs biggest gain in nearly three years as tech valuations recover


    Masayoshi Son, CEO of SoftBank, has been weighing up various options for chipmaker Arm after Nvidia walked away from buying the company.

    Alessandro Di Ciommo | Nurphoto | Getty Images

    SoftBank posted its biggest gain in nearly three years at the flagship tech investment arm, the Vision Fund, in the December quarter amid a recovery in valuation of technology companies.

    Here’s how SoftBank did in the December quarter against LSEG estimates:

    • Net sales: 1.77 trillion Japanese yen ($11.9 billion) versus 1.8 trillion Japanese yen expected.
    • Net income: 950 billion Japanese yen versus 196.5 billion yen expected.

    The Vision Fund logged a gain on investment of 600.7 billion Japanese yen, continuing a recovery after record losses in the previous fiscal year. That gain is the highest since the March 2021 quarter when the Vision Fund posted a 3.59 trillion yen gain.

    SoftBank’s net income was also the first first quarterly profit after four straght losses.

    SoftBank’s flagship tech investment arm had a rough time in the fiscal year that ended in March last year, posting a record loss of around $32 billion amid a slump in tech stock prices and the souring of some of the business’ bets in China.



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  • Ousted OpenAI CEO Altman planning new AI venture

    Ousted OpenAI CEO Altman planning new AI venture

    By Krystal Hu, Anna Tong and Jeffrey Dastin

    (Reuters) -Sam Altman, the recently ousted CEO of OpenAI, has been working on a new artificial intelligence venture he is planning to launch, sources briefed on the plan said on Saturday.

    Former OpenAI president Greg Brockman, who said he quit OpenAI over Altman’s firing on Friday, is expected to join the effort, according to the Information, which reported the venture earlier citing a person familiar with the matter.

    Altman could not be reached for comment and Brockman did not immediately respond to a Reuters request for comment.

    Some researchers at OpenAI, including Szymon Sidor, have quit the company over the CEO change but it was unclear if Sidor and others will join Altman’s new venture.

    Altman and Apple’s former design chief Jony Ive have been discussing building a new artificial intelligence (AI) hardware device, the Information reported in September. It also reported at the time that SoftBank CEO Masayoshi Son has also been involved in the conversation.

    The board of OpenAI, the company behind hit product ChatGPT, on Friday pushed out its high-profile CEO Altman. Co-founder Brockman quit shortly after Altman was fired.

    Altman’s ouster was over “breakdown of communications,” not “malfeasance”, Chief Operating Officer Brad Lightcap wrote in an internal company memo earlier Saturday that was viewed by Reuters.

    (Reporting by Krystal Hu in New York, Anna Tong and Jeffrey Dastin in San Francisco, Gursimran Kaur in Bengaluru; Editing by Chizu Nomiyama and Kenneth Li)

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  • Arm climbs 25% in Nasdaq debut after pricing IPO at $51 a share

    Arm climbs 25% in Nasdaq debut after pricing IPO at $51 a share

    Arm CEO Rene Haas and executives cheer as Softbank’s Arm, a chip design firm, holds an initial public offering at the Nasdaq MarketSite in New York, Sept. 14, 2023.

    Brendan Mcdermid | Reuters

    Arm Holdings, the chip design company controlled by SoftBank, jumped nearly 25% during its first day of trading Thursday after selling shares at $51 a piece in its initial public offering.

    At the open, Arm was valued at almost $60 billion. The company, trading under ticker symbol “ARM,” sold about 95.5 million shares. SoftBank, which took the company private in 2016, controls about 90% of shares outstanding.

    On Wednesday, Arm priced shares at the upper end of its expected range. On Thursday, the stock first traded at $56.10 and ended the day at $63.59.

    It’s a hefty premium for the British chip company. At a $60 billion valuation, Arm’s price-to-earnings multiple would be over 110 based on the most recent fiscal year profit. That’s comparable to Nvidia’s valuation, which trades at 108 times earnings, but without Nvidia’s 170% growth forecast for the current quarter.

    Arm Chief Financial Officer Jason Child told CNBC in an interview that the company is focusing on royalty growth and providing products to its customers that cost and do more.

    Many of Arm’s royalties come from products released decades ago. About half the company’s royalty revenue, which totaled $1.68 billion in 2022, comes from products released between 1990 and 2012.

    “As a CFO, it’s one of the better business models I’ve seen. I joke sometimes that those older products are like the Beatles catalog, they just keep delivering royalties. Some of those products are three decades old,” Child said.

    In a presentation to investors, Arm said it expects the total market for its chip designs to be worth about $250 billion by 2025, including growth in chip designs for data centers and cars. Arm’s revenue in its fiscal year that ended in March slipped less than 1% from the prior year to $2.68 billion.

    Arm’s architecture is used in nearly every smartphone chip and outlines how a central processor works at its most basic level, such as doing arithmetic or accessing computer memory.

    Child said the company sold $735 million in shares to a group of strategic investors comprising Apple, Google, Nvidia, Samsung, AMD, Intel, Cadence, Synopsis, Samsung and Taiwan Semiconductor Manufacturing Company. It’s a testament to Arm’s influence among chip companies, which rely on Arm’s technology to design and build their own chips.

    “There was interest to buy more than what was indicated, but we wanted to make sure we had a diverse set of shareholders,” Child said.

    In an interview with CNBC on Thursday, SoftBank CEO Masayoshi Son emphasized how Arm’s technology is used in artificial intelligence chips, as he seeks to tie the firm to the recent boom in AI and machine learning. He also said he wanted to keep the company’s remaining Arm stake as long as possible.

    The debut could kick open the market for technology IPOs, which have been paused for nearly two years. It’s the biggest technology offering of 2023.

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  • SoftBank CEO says artificial general intelligence will come within 10 years | CNN Business

    SoftBank CEO says artificial general intelligence will come within 10 years | CNN Business


    Tokyo
    Reuters
     — 

    SoftBank CEO Masayoshi Son said he believes artificial general intelligence (AGI), artificial intelligence that surpasses human intelligence in almost all areas, will be realized within 10 years.

    Speaking at the SoftBank World corporate conference, Son said he believes AGI will be ten times more intelligent than the sum total of all human intelligence. He noted the rapid progress in generative AI that he said has already exceeded human intelligence in certain areas.

    “It is wrong to say that AI cannot be smarter than humans as it is created by humans,” he said. “AI is now self learning, self training, and self inferencing, just like human beings.”

    Son has spoken of the potential of AGI — typically using the term “singularity” — to transform business and society for some years, but this is the first time he has given a timeline for its development.

    He also introduced the idea of “Artificial Super Intelligence” at the conference which he claimed would be realized in 20 years and would surpass human intelligence by a factor of 10,000.

    Son is known for several canny bets that have turned SoftBank into a tech investment giant as well as some bets that have spectacularly flopped.

    He’s also prone to making strident claims about the transformative impact of new technologies. His predictions about the mobile internet have been largely borne out while those about the Internet of Things have not.

    Son called upon Japanese companies to “wake up” to the promise of AI, arguing they had increasingly fallen behind in the internet age and reiterated his belief in chip designer Arm as core to the “AI revolution.”

    Arm CEO Rene Haas, speaking at the conference via video, touted the energy efficiency of Arm’s designs, saying they would become increasingly sought after to power artificial intelligence.

    Son said he thinks he is the only person who believes AGI will come within a decade. Haas said he thought it would come in his lifetime.

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