Just when we thought AI couldn’t get any hotter, it got hotter. Yesterday, Masayoshi Son announced plans to take the industry by storm.
From a report out overnight in CNBC:
SoftBank Group chairman and CEO Masayoshi Son on Wednesday said that the Japanese investment firm plans to shift from “defense mode” to “offense mode” and wants to capitalize on the AI boom.
“Now, the time has come to shift to offense mode,” Son said during a shareholders’ annual general meeting.
Softbank has more money than just about anyone.
Despite some high profile losses, its second Vision Fund still tips the scales at $30 billion.
And Masa is about to fill up his piggybank.
Softbank owns 100% of Arm, a British chipmaker. Arm has filed for an IPO which will put billions in Masa’s coffers.
That money will be heading straight into AI startups.
Already, the market for early stage AI companies is dangerously overheated.
Just last week, Mistral AI raised over a hundred million dollars at a $260 million valuation. It has no product or customers.
In fact, the company is just four weeks old.
Once Masa dumps a few tens of billions onto the market, the Mistral AI round may look quaint.
Masa has made some incredible investments, like Alibaba. But Softbank also has a history of giving too much money to startups at excessive valuations.
Perhaps the most famous is WeWork. Softbank invested over $10 billion at valuations as high as $47 billion.
Today, WeWork is worth just $163 million.
I expect Softbank to repeat its mistakes with its AI investments. Look for huge checks going into fledgling companies at eyewatering valuations.
I already find the AI market difficult to invest in.
Many companies have amazing tools but few if any paying customers. And that amazing product is quickly upstaged by an even better one weeks later.
Add in sky high valuations, and it’s a great way to lose your money.
As Masa trains his firehose of cash on the market, these dynamics will only intensify.
I will continue to invest in great AI companies at reasonable valuations, as I always have. And I’m also taking a special look at non-AI companies with great businesses that provide real value to customers.
If no one else wants them, I’m happy to back up the truck.
What do you think of Masa’s pivot to AI? Leave a comment and let us know!
If you enjoyed this post, subscribe for more like this!
More on tech:
How I Pick Companies and More at the Single Family Office Summit
Save Money on Stuff I Use:
This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 with great returns.
More on Fundrise in this post.
If you decide to invest in Fundrise, you can use this link to get $100 in free bonus shares!
I’ve used Misfits for years, and it never disappoints! Every fruit and vegetable is organic, super fresh, and packed with flavor!
I wrote a detailed review of Misfits here.
Use this link to sign up and you’ll save $15 on your first order.
Tremendous 
Leave a comment