SoftBank’s ‘Go Big or Go Home’ AI Bets Fire Up Markets as IPOs Near

The Nikkei is quickly becoming the land of the rising Masayoshi Son.

The audacious businessman’s SoftBank surged 4.6% in Tokyo on Monday to a new record high. The white-hot stock is now up 40% in the past four days of trading, propelled by Son’s “go big or go home” bets on artificial intelligence.

Killer Strategy

Son is known as the ojin-kiraah or “old man killer.” The sobriquet is not as macabre as it sounds, referring to his ability to charm elder tycoons and investors to back his ventures when he was still the up-and-coming son of a bootlegger. Now 68 and a globally influential technology tycoon, he’s the one founders are looking to charm. Son founded SoftBank in 1981 as a software distributor, anticipating the personal computer boom that would follow, and ever since has carried out a high-conviction, “swing for the fences” investing approach that makes Mickey Mantle look timid at the plate.

Over the years, Son’s ambitions led the company to play a role in seemingly every development in the internet’s modern trajectory. There are search engines, where SoftBank helped set up Yahoo! Japan in the pre-Google 1990s. There’s home broadband, where it began widely distributing modems to customers in the early 2000s. There was getting in on the ground floor of China’s internet economy by investing in Alibaba in 2000. There are smartphones, where SoftBank set up a mobile unit in 2006 and first brought the iPhone to Japan two years later. Son’s record, however, is not without a black eye or three — he set the record for biggest fortune lost during the dotcom bust (since broken by Elon Musk); there were regrettable investments in WeWork, Wirecard and Greensill; and his two massive, Saudi-backed Vision funds have posted mixed results. SoftBank’s latest rise comes as Son has again positioned the firm at the tech vanguard, betting that huge AI gambles will pay off:

• SoftBank is one of OpenAI’s top shareholders, having built up a $64.6 billion, 13% stake in the ChatGPT maker. Reports suggest OpenAI plans to soon file for an initial public offering, turning what have so far been paper gains for SoftBank into liquidity.
• SB Energy, another portfolio company with significant exposure to the AI trade, is also plotting an IPO in the US. The energy infrastructure provider received $1 billion in commitments from SoftBank and OpenAI earlier this year as part of the massive $500 billion Stargate project.

Du Japon à la France: SoftBank sold its entire $5.8 billion stake in Nvidia late last year to fund its bets on OpenAI and Stargate, a US-based joint venture that also includes Oracle and Emirati investment firm MGX. Not one to stop there, Son is reportedly considering another massive, national AI infrastructure investment worth up to $100 billion, this time in France.