SoftBank Group is making significant shifts in its investment strategy, moving away from its high-profile venture capital deals and towards strategic investments in semiconductors and artificial intelligence, as part of a broader reorientation under founder Masayoshi Son, according to a Bloomberg report.
According to recent regulatory filings, the Vision Fund, the world’s largest startup fund, has decreased its US-listed holdings by nearly USD 29 billion since the end of 2021, due to a combination of asset sales and declining share prices.
The Vision Fund’s notable divestments include stakes in companies like Coupang, DoorDash and Grab Holdings Ltd., along with a full exit from Uber Technologies Inc. and even Zomato Additionally, the fund has sold its 25 per cent stake in chip designer Arm Holdings Plc back to SoftBank, just as Arm’s market value skyrocketed to about USD 106 billion following its public listing last year.
This strategic pivot reflects a more focused investment approach, with Masayoshi Son reportedly preparing for potential ventures in the AI and semiconductor fields. This includes plans that could see SoftBank leading a USD 100 billion chip venture to challenge major industry players like Nvidia. Such moves align with SoftBank’s recent direct investments, such as leading a USD 1.05 billion funding round for UK-based self-driving startup Wayve Technologies Ltd., and discussions to acquire British semiconductor startup Graphcore.
SoftBank’s reorientation away from venture capital extravagance towards more strategic technological investments comes after a series of high-profile failures, including WeWork Inc., which impacted the fund’s reputation and financial standing. These adjustments also coincide with a broader cooling in the global venture capital market, which has become wary of the previously rampant high valuations.
In financial terms, the Vision Fund has significantly slowed its pace of new investments, focusing instead on asset management and mitigating losses, contributing 7.3 trillion Yen (USD 47 billion) to SoftBank’s overall net asset value by the end of December. The fund’s aggressive selling strategy has increased SoftBank’s cash reserves, which analysts suggest could support its pivot to investments in generative AI and other cutting-edge technologies.
(Inputs from Bloomberg)
