Masayoshi Son's 10,000 IQ gamble: buying a God-like AI for humanity
"I was born for this purpose."
SoftBank is making moves again, and this time, it's all about artificial intelligence.
According to Bloomberg, SoftBank's Vision Fund 2 is set to invest $10-20 million in Perplexity, the Silicon Valley AI search unicorn. This investment, part of a $250 million funding round, will triple Perplexity's valuation to $3 billion and strengthen the strategic partnership between the two companies.
But this is just the tip of the iceberg in SoftBank's recent AI ventures. The Japanese tech investment giant has also acquired UK AI chip manufacturer Graphcore and formed a medical joint venture with US intelligent diagnostics company Tempus AI. However, these pale in comparison to SoftBank's plans to raise $10 billion for data center GPUs and energy projects.
Even more ambitious is the rumored $100 billion investment to create an AI chip industry titan to rival Nvidia and complement SoftBank's ARM holdings. If successful, this would dwarf Microsoft's $10 billion bet on OpenAI and match the audacious "Stargate" supercomputer projects.
This bold initiative, codenamed "Izanagi" after the Japanese god of creation, may also be a nod to AGI (Artificial General Intelligence) hidden within its name. But for SoftBank's visionary leader, Masayoshi Son, even AGI is no longer enough.
Son's return: all in on ASI, 10,000 times smarter than humans in 10 years
At SoftBank's recent 44th annual shareholders meeting, Son, who had been out of the public eye for eight months, delivered an impassioned speech about his AI vision and human-centric philosophy.
"SoftBank's mission is to drive human evolution and realize ASI (Artificial Super Intelligence)," Son declared. "I was born for this purpose."
In Son's vision, ASI will be "a completely different story" compared to AGI, which is merely 10 times smarter than humans. ASI, he predicts, will be 10,000 times more intelligent than any human genius. Son believes AGI will be achieved in the next three to five years, followed by rapid evolution as models collaborate like neurons in the brain, ultimately reaching ASI levels within a decade.
To fuel this ASI revolution, SoftBank has positioned itself across the AI value chain, from infrastructure to vertical applications. At the center is ARM, the chip design company SoftBank fully acquired, which provides services for cloud computing, data centers, and embedded systems. SoftBank is also planning a dedicated AI chip division, promising to develop prototype chips by spring 2025 and begin mass production in the fall.
But why pursue intelligence 10,000 times greater than human capacity?
"Because some things can't be done with ordinary intelligence, and even AGI isn't enough," Son explained. He shared personal motivations, including the recent loss of his father to cancer, and outlined lofty goals like reducing traffic accidents, combating disasters and pandemics, and even predicting the next ice age.
"SoftBank's core business has never changed—making people happier through the information revolution. We are confident we can do it," Son asserted.
From hero to zero and back again: the Vision Fund rollercoaster
Son's journey hasn't been smooth sailing. After early successes with Yahoo and Alibaba, he borrowed $100 billion from Middle Eastern investors in 2017 to establish Vision Fund 1, followed by the $108 billion Vision Fund 2 in 2019, focusing on AI, robotics, semiconductors, etc.
However, high-profile bets on companies like WeWork, Uber, and Didi Chuxing led to significant losses. The WeWork debacle alone cost SoftBank over $11.5 billion in equity value and $2.2 billion in debt, forcing Son to publicly apologize for his "foolish" decisions.
The FTX collapse in 2021 further compounded SoftBank's woes. In 2022, the Vision Fund reported a staggering $39.8 billion loss, pushing Son's personal debt to nearly $200 billion. Amidst mounting criticism, Son stepped back from day-to-day operations in November 2022.
Yet, just as SoftBank was licking its wounds, the generative AI revolution exploded.
Son's premature exit from Nvidia investments in 2019 led to missed opportunities worth billions. Meanwhile, AI frontrunners like OpenAI, Anthropic, and Cohere attracted top-tier investors, but SoftBank was notably absent.
A Silver Lining: ARM's Triumph and SoftBank's Windfall
In a twist of fate, while WeWork brought heavy losses, ARM—once considered a "hot potato"—became SoftBank's saving grace. Following a failed sale to Nvidia in 2022, SoftBank pushed for ARM's IPO. The September 2023 listing on Nasdaq was a resounding success, raising $4.9 billion.
To date, ARM's stock price has surged 159%, with a market cap exceeding $187 billion. SoftBank, holding a 90% stake, has seen its ARM investment balloon to $168.3 billion. This represents a net gain of $136.3 billion based on the initial $32 billion investment, far more than offsetting previous losses from WeWork and Uber.
Emboldened by ARM's explosive growth and perhaps eager for one last big gamble, Son has returned to the spotlight with his AI dreams and trademark adventurous spirit. He announced that SoftBank would shift from defense back to offense, going all-in on artificial intelligence.
On July 4th this year, SoftBank's stock price hit 11,190 yen, a 24-year high. It seems Son's latest bet might just pay off.
At 67, Masayoshi Son refuses to exit the stage
Born on August 11, 1957, in Tosu, Saga Prefecture, as a third-generation Korean-Japanese, Son moved to the US at 16 to study at UC Berkeley. There, he invented a pocket translator, selling the patent to Sharp for $1 million. Returning to Japan in 1981, he founded SoftBank Group.
Now 67, with SoftBank at 43, Son's persistence stands out among his peers. Many renowned investors of his generation, like Sequoia's Michael Moritz and Benchmark's Bill Gurley, chose to retire around 50. Son, who initially planned to retire at 60, has already delayed that by seven years.
"I'm getting old, with only the rest of my life to live, but I still haven't accomplished anything. Is this okay? Can I grow old and die like this?" Son asked emotionally at this year's shareholders meeting.
At the crossroads of mobile internet and artificial intelligence, Son stubbornly stands in the spotlight alongside younger faces, reminding everyone that his stage hasn't dimmed—or perhaps it's just beginning to truly shine:
"The reason for Masayoshi Son's existence is to make ASI a reality," he proclaimed. "Compared to this grand mission and dream, today's stock price fluctuations, buybacks, or dividends seem very small. We should forget about these things because they don't matter. If you believe in Masayoshi Son's dream, then please support me."