Source: Broker China
Will Masayoshi Sun switch to semiconductors and artificial intelligence?
On May 10, according to Bloomberg, Masayoshi Son (Masayoshi Son)'s Japan$SoftBank Group (9984.JP)$A few days ago, its Vision Fund (Vision Fund) quietly sold or wrote off the shares of multi-billion dollar listed companies, and the total amount shrunk by nearly $29 billion.
Notably, according to people familiar with the matter, the company's founder, Sun Zhengyi, is shifting from venture capital deals, which he was once passionate about, to strategic investments in the semiconductor and artificial intelligence fields.
SoftBank Vision Fund's shareholding portfolio shrinks by tens of billions of dollars
Vision Fund's US listed company portfolio has shrunk by nearly $29 billion since the end of 2021, according to asset sale documents submitted by SoftBank to the US Securities and Exchange Commission. The fund reduced its holdings$Coupang (CPNG.US)$,$DoorDash (DASH.US)$und$Grab Holdings (GRAB.US)$Shares of other companies.
Furthermore, Vision Fund also owned a chip design company last year$Arm Holdings (ARM.US)$Shares were sold to SoftBank. Arm is headquartered in Cambridge, England. Its energy-saving chip design is used in almost all mobile devices around the world, and was listed on the US stock market in September last year. However, Arm is currently relatively weak, has laid off more than 100 employees, and has greatly slowed down new investment.
Vision Fund is also gradually reducing holdings in Indian startups Paytm and China$SENSETIME-W (00020.HK)$Technology Group shares. Currently, SoftBank's shareholding ratio in these two companies is less than 5%.
According to people familiar with the matter, Sun Zhengyi is selling assets in the fund's portfolio to prepare for a possible entry into the field of artificial intelligence and related hardware. Masayoshi Sun has set his sights on new fields, in part because he was inspired by Arm's success. Since it went public last year, the market value of this chip design company has soared to around 106 billion US dollars, making SoftBank's 90% shareholding value surpassing the entire SoftBank Group. Currently, Vision Fund is selling back 25% of its Arm shares to SoftBank in exchange for SoftBank's $8.2 billion capital commitment.
Currently, SoftBank assets are mainly divided into Arm,$BABA-SW (09988.HK)$/$Alibaba (BABA.US)$, SoftBank Communications, Vision Fund Phase 1 and 2, etc. The two Vision Funds and the Latin American Fund jointly manage committed capital of over $160 billion.
The holding of commercial soup has been reduced to less than 5%
It is worth mentioning that the Hong Kong stock market has performed quite well recently, and SoftBank was once its second-largest shareholder.
From April 24 to May 7, Shangtang's stock price soared, rising from a high of HK$0.63 to HK$1.77, during which time the highest increase was over 180%. According to the news, on April 23, Shangtang launched the 600 billion parameter large model “Daily New 5.0” to improve knowledge, mathematics, reasoning and coding capabilities, and also launched an all-in-one version of the industry's largest model and SDK version for mobile devices. According to Shang Tang's evaluation, Ririxin 5.0 surpassed GPT-4 Turbo in most core test set indicators, and also surpassed Claude 3.0 Opus released by OpenAI's previous competitor Anthropic.
A number of institutions have expressed their optimism about Shangtang's stock price expectations and ratings. CICC published a report stating that the capabilities of the Shangtang model have been upgraded again to fully target the GPT-4 Turbo. Last year, the company's strategy focused on generative AI, and commercialization and technological innovation accelerated; furthermore, the company's fundamentals are expected to improve significantly this year, and revenue growth and loss reduction are expected.
Since the beginning of last year, Alibaba Group and SoftBank Group have gradually reduced their holdings. Among them, Alibaba sold all of its holdings at the end of last year. On April 3 of this year, SoftBank reduced its shareholding ratio to 4.8% (less than 5% will not be disclosed). Some institutions believe that the pressure brought about by the majority shareholders of Shangtang is gradually easing at this stage; in addition, the inflow of foreign capital is expected to support the Hong Kong stock market.
According to the prospectus data, SoftBank Group is the second-largest shareholder of Shangtang. Starting with the 2018 C+ round, SoftBank Group participated in 5 rounds of Shangtang's financing, holding a total of 4.731 billion shares before the IPO. The financing costs of the Shangtang C+ to D+ series were $0.2331, $0.2836, $0.3536, and $0.4094, respectively. If calculated, SoftBank Group's holding cost for Shangtang was US$1,429 billion, which is approximately HK$11.177 billion to HK$11.217 billion based on the exchange rate of the relevant date, with an average cost per share of approximately HK$2.36 to HK$2.37 billion.
Entering artificial intelligence
Regarding the latest developments in artificial intelligence and related hardware, according to some sources, one possible project that Sun Zheng is about to launch is to invest 100 billion US dollars to establish a chip joint venture to compete with Nvidia and provide semiconductors to promote the development of artificial intelligence services.
Furthermore, according to the “Nikkei News” report in late April, Japan's SoftBank Group will spend 150 billion yen to develop generative AI by the end of 2025, and plans to raise computational power to tens of times the current level to develop generative AI with the same level as the world's most advanced models. The required GPU chips will be purchased from Nvidia (Nvidia).
According to the report, SoftBank has invested 20 billion yen to build computing power infrastructure in 2023, and plans to invest an additional 150 billion yen during the period 2024-2025. It is reported that SoftBank's investment in computing power infrastructure will be the largest in the history of Japanese companies, and the required GPUs will be purchased from Nvidia, and in addition to being used by SoftBank to develop and develop synthetic AI in-house, they are also considering leasing them to external companies.
The latest development is news from May 8. According to people familiar with the matter, the Japanese investment company SoftBank Group is in acquisition negotiations with British artificial intelligence chip maker Graphcore. This is a troubled British artificial intelligence (AI) semiconductor startup. At one point, the valuation was as high as 2.8 billion US dollars (currently about 20.036 billion yuan).
According to reports, Graphcore is a manufacturer of artificial intelligence chips focused on data centers and cloud computing. Graphcore uses a different type of chip technology than Arm. The company was founded in Bristol in 2016 and is dedicated to developing the design of large-scale “intelligent processing units” to help with artificial intelligence software processing in data centers. The startup touted its product as a competitor to Nvidia's high-end graphics chips, and was favored by well-known investors such as Samsung Electronics, Bosch, and Sequoia Capital. The new round of financing in 2020 valued Graphcore at $2.8 billion.
An anonymous insider said that the two companies have been in discussions for several months, but recently entered into more in-depth deal negotiations. They said financial terms are yet to be determined and negotiations may still break down. A source said that a final agreement will not be reached anytime soon. If completed, this acquisition will be SoftBank's further layout in the field of artificial intelligence.
editor/tolk