Let's start by asking, now that the book is written and out, what is SoftBank? Well, first of all, thanks for having me. Great to be here. What is SoftBank? You must know, you just wrote a book about it.
Well, the name itself is a bank for software and gets back to Masa's roots as a software distributor for Microsoft software. But SoftBank is really about Masayoshi Son, and I consider it one of the great privileges of my life. To have worked alongside him for a while, you know, kind of fancy titles aside, you know, my role really there was chief, you know, kind of dealmaker in chief, so to speak.
And I think the one thing I would really highlight about him, the standout characteristic, is he's a futurist in the true sense of the word. And, you know, that term visionary genius, it gets thrown around a lot. But he's proven it time and time again.
Well, it's an interesting point in sort of the mechanics of how SoftBank works, right? It is a conglomerate. Then you have the Vision Fund part, Vision Fund 1 and 2. Each has an investment committee.
My point being that ultimately it still in many senses comes down to Masa making an instinctive call on whether or not to invest in something. Is that what you found? It's more than just instinctive. And the answer is yes. For me, at least, SoftBank is all about Masa.
And the standout thing about South Bank is he gets the big bets spectacularly right. I mean, stories like WeWork, they're kind of fun, amusing. I talk about it, too. But nobody's made a movie about Arm, for example, which is just a remarkable success story.
And we can talk about that. SoftBank Japan is lesser known, low profile. There's no reason a U.S. audience or U.S. investors would be familiar with that.
But it's a remarkable story. I mean, you know, people think that that that Masa's comeback in the in the 2006, 2007 had to do with Alibaba. And Alibaba was phenomenal. But SoftBank Japan, which is a mobile phone company, Vodafone was so desperate to get rid of it. They actually lent Masa money to take it off their hands.
And you know he bought that company on the strength of a handshake from Steve Jobs to give him an exclusive for smartphones. And he kind of saw that coming. So he's made these huge bets.
And by the way, he's gained on that on a mark-to-market basis on SoftBank Japan. Sorry, on Vodafone Japan is to the order of $40 billion. On ARM it's $100 billion.
So he gets these big bets spectacularly. But I know he has got some spectacular misses as well. And that's the VC.
Wei, you bet big, some of them hugely pay off, others don't. But there was this moment where money being thrown at WeWork, money being thrown at Improbable in the UK, money being thrown at WAG, which went horribly wrong, a dog-walking service. What makes the OpenAI potential bet that we're hearing about, SoftBank bringing in 500 million? Is that the right one to be throwing money at right now?
Well, I... I'm not sure throwing money is the way I'd describe it. I think you have to keep in mind that, you know, Masa, he's been fascinated by AI. He was talking about this when I first got to know him back in 2014, and I described this in my book, sitting on his porch in his home in Tokyo.
And, you know, he was talking obsessively about AI, about singularity, and what it would mean from a technology perspective. And I honestly... I didn't take him seriously at the time.
So it's it's and he's been very clear now. It is, I think, in June at his AGM. He announced that everything we've seen before is a warm up deck.
So he's ready to make some some he's ready to make some big moves. And that's a long winded way of answering your question. I mean, you look at SoftBank and the scale on which it operates.
I think it's sitting on certainly north of 30 billion, probably closer to 40 billion in cash. So a I don't. I don't think of 500 million in open AI as a big bet by soft bank standards. I think it's sort of being in the game, so to speak. I mean, I'm kind of waiting for Sun Sun to make his next big move.
And it will be big, knowing him. That's just the way he rolls. To what end?
Paint us the vision, therefore, because we, too, have heard the AI thesis. This is why the deal that you helped orchestrate. was first the target. But to what end?
What does he build eventually? Because sometimes he's purchasing with SoftBank, sometimes he's purchasing with the VC arm. Well, let's be clear. The first Vision Fund was a true fund in as much as it involved third-party money, mainly from the Middle East. The other Vision Funds are on balance sheet.
So You know, the subtlety of SoftBank, which is the VC arm, to me, it's not meaningful in that context, right? I mean, so, for example, when you read about SoftBank buying Graphcore, my understanding is that's a strategic deal. And what Sun Tzu intends to do with that in conjunction with his ownership of arm, you know, I think remains to be seen.
But talking about vision, again, I mean, I speak as I've been out of SoftBank for five years now, so I'm obviously not an insider. But in terms of what I see, first of all, there's ARM. ARM is, and I don't follow stocks, I'm not a research analyst, so I'm not going to comment on the valuation, but ARM for me is remarkably well positioned as AI moves to the edge of the network.
ARM has always been about blueprints for chip design. Energy efficiency has always been their secret sauce. And when you get to the edge, AI with Apple intelligence and smartphones and autonomous cars, That gets to be really, really important.
I think that, you know, I think the Graphcore acquisition is a signal that, and I think the company's been pretty explicit about it, that ARM intends to be a challenger to NVIDIA in terms of NVIDIA's dominances in data centers. So ARM intends to challenge NVIDIA in that regard, too. So there's a lot of that going on. My own view of AI, you know, I do. spent a fair bit of time with Robert Pincus as a senior advisor.
And what they're seeing, they've avoided getting into the LLMs. But what they're seeing is AI very focused on their portfolio and the implications for deploying AI, margin improvements. Jensen Wang talked about it in his last earnings release. I mean, he gave the example of Amdocs and a 30% reduction in customer service costs by deploying an AI agent.
So that stuff is very, very real. Let me ask you something to end the conversation. They were in early in NVIDIA SoftBank, but then they got out early and they grew that.
500 million in OpenAI may not be big. You said that they will make their next big bet. How do you know that he'll time it right?
And that in the end with AI, whatever happens, he'll be a part of whatever the conversation we're having is? Well, because the track record speaks for itself. He's done it over and over again, right? I mean, I think with smartphones, he was at least two to three years ahead of it. I don't know what his next big move will be, but I do know it's going to be big.
And I think he's come out and said it will be something to do with AI. And it may well involve, you know, coming energy is another space. Buy SoftBank Energy, enough money and people get this.
But SoftBank Energy is one of the leading solar power generators. And that, as we know, is a huge bottleneck in terms of the build out of these data centers. I mean, they're hugely power hungry.
So it could be something in that space, for example.