Grab your popcorn, Masa Son is back
SoftBank plots its OpenAI affair
Masayoshi Son has been laying low in recent years, rebuilding the strength of his tech conglomerate SoftBank. DD has missed his often adventurous financial forays.
Masa has been circling the AI craze with relative quiet, but finally he’s within grasp of securing a seat at the table of Silicon Valley’s great investment craze.
SoftBank is in talks to invest as much as $25bn in OpenAI, the darling at the heart of the AI frenzy. The deal would make the Japanese group OpenAI’s biggest financial backer.
The investment would be part of a bigger funding round of about $40bn at Sam Altman’s company, which would push the ChatGPT-maker’s valuation to $300bn, the FT reported late on Thursday.
Masa’s known for majorly leveraging up his investments (one banker in 2019 said there were “layers of leverage upon leverage”). This cuts two ways: when things turn sideways, they implode. But a good call can lead to massive payouts.
When it comes to AI, is Masa buying in at the end of the cycle?
SoftBank’s famous for a few spectacular blow-ups. WeWork’s valuation plummeted after it had to scrap its IPO plan (and then later, filed for bankruptcy). SoftBank’s ties and backing of Greensill Capital also ended in disaster.
So, for a few years, Masa has kept under the radar, licking his wounds while building up a strong conviction that AI would be the centrepiece of his next great set of investments.
And the spigot of massive tech investments has once again opened up, coaxing him to make a big dice roll.
SoftBank’s one of just four investors who have pledged a total of $100bn to fund Stargate, a major new data centre project unveiled last week. (Others backing the project touted by President Donald Trump include Oracle, Abu Dhabi state fund MGX and OpenAI.)
The ties between OpenAI and SoftBank are multiplying quickly. The new potential $25bn investment would cover the latter’s commitment to the US infrastructure project, according to several people familiar with the plans.
When it comes to bets on AI, Masa has had some good luck so far. His investment in Arm — of which SoftBank’s still the majority shareholder — has made him a fortune, with the stock trebling since going public.
This has given him a new stockpile of assets to leverage in every which way to seed his bets. Such firepower has historically become a fount of entertainment for Wall Street, or just good drama.
Please join DD in pulling up a seat with some popcorn and a stiff drink in hand, because our boy’s officially back.