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By Anton Bridge
TOKYO (Reuters) - Japanese technology investor Softbank Group believes it has an advantage over smaller rivals because it can leverage its entire $183.6 billion portfolio to help it build an ecosystem of firms that can employ artificial intelligence, a top executive said on Monday.
"Because of the size of our platform, we're able to bring those companies to see how they can utilise generative AI or LLMs (large language models)," Navneet Govil, chief financial officer (CFO) of SoftBank's Vision Fund investment arm, told Reuters in an interview.
"When you have 477 portfolio companies you can facilitate synergies, which isn't possible if you're a smaller platform," he said.
The Vision Fund, which upended the world of venture capital with high conviction bets on startups such as ridesharing app Uber and shared office provider WeWork, was hit hard when rising interest rates and political instability hammered valuations of growth startups in 2022.
Govil said that the Vision Fund is not yet making investment decisions based on the potential AI ecosystem tie-ins for a given company. The fund does measure revenue generated by introducing its portfolio companies to one another as customers, suppliers, or to enter new markets, particularly Japan.
The Vision Fund has brought 50 of its 477 portfolio companies to Japan, which would not have been possible were they acting alone, Govil said.
SoftBank has invested in comparatively few additional companies in recent years. Plummeting tech valuations and record investment losses from 2022 forced it to scale back new investments and adopt stricter criteria.
The group and Vision Funds combined invested around $4 billion in each of the last two years.
In previous years the Vision Fund's investments alone had reached around $20 billion in a year.
But $4 billion per year is still larger than other funds similarly investing in technology startups, Govil said.
(Reporting by Anton Bridge; Editing by Michael Erman)
