Message from SoftBank Vision Funds Management—SoftBank Group Report 2023
Investing in AI Generational Growth
Co-CEO, SB Investment Advisers
At the macro-level, volatility has been ever-present over the past 12 months. Challenging dynamics in geopolitics, regulations, and monetary policy led investors worldwide to pivot towards a more conservative approach following the high levels of capital deployment in fiscal 2021.
Despite its challenges, fiscal 2022 was a tipping point for AI and its widespread adoption. People around the world watched with fascination and delight as generative AI wrote stories, told jokes, and created original art. The adoption rate of OpenAI’s ChatGPT was unprecedented; it took only two months for the platform to reach 100 million unique users. By comparison, it took TikTok and Instagram nine months and 28 months, respectively, to hit the same milestone. This is the latest in an incontrovertible and growing dataset proving that AI has transitioned to the mainstream.
While a number of our portfolio companies are applying generative AI in novel applications, SoftBank Vision Funds are a diversified investment platform, meaning that we have been able to invest across the full stack of AI technology. AI spans an ever-widening spectrum of use cases, and we think 22of our capital deployment broadly across three levels. The first is the foundation layer, where our portfolio companies are developing AI architecture through chip design to underpin the raw processing power required for a generational change in computing. Second, the application layer represents the essential digital infrastructure to enable the widespread adoption of AI at the B2B level. Finally, at the services layer, users interface with the technology directly to access new products and services across every sector, from digital health to financial services.
The growing prevalence of these technologies will transform existing industries and create entirely new ones. According to PwC, AI is expected to enable $15.7 trillion of economic growth by 2030.*1 Similarly, by 2025, global data volume is expected to have increased by more than 10 times from 10 years prior.*2 As more data become available, AI’s impact will continue to grow and alter the trajectory of enterprise technology. Similarly, AI is revolutionizing health tech, accelerating the search for potential drug molecules up to a thousand times faster.
The SoftBank Group has been investing ahead of major technology shifts for over 40 years, and we have been ahead of the field in investing growth capital in AI at scale, first with the Group’s acquisition of Arm in 2016 and subsequently with the launch of SoftBank Vision Fund 1 in 2017. While cynics would argue there is a degree of hype around generative AI at present, remember Amara’s Law.*3 AI is a generational technology that sits above market cycles. It is ushering in a wave of inevitable digital change. 2022 will be recalled as a challenging time for global investing, but our portfolio is constructed upon a continued conviction in the AI revolution. We are confident our portfolio companies are primed to benefit as the potential of this technology becomes reality.
On a personal note, as CEO of SB Investment Advisers, my role has modified to focus primarily on the performance and monetization of SoftBank Vision Fund 1. While I have passed day-to-day management for SoftBank Vision Fund 2 and LatAm Funds to my colleagues on the Executive Committee, I remain highly committed to the firm. It continues to be a privilege to serve the SoftBank Group and the Fund’s other Limited Partners; I am motivated and energized in striving to attain our investment objectives.
PwC, “Sizing the prize, PwC’s Global Artificial Intelligence Study: Exploiting the AI Revolution”
Statista, “Volume of data/information created, captured, copied, and consumed worldwide from 2010 to 2020, with forecasts from 2021 to 2025”
“We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run,” coined by Roy Amara, past president of the Institute for the Future.
This page is based on the information as of July 27, 2023.
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