Nvidia stock is sold early! Son missed out on a massive $150 billion fortune

Tencent Technology

2024-06-23 07:13Posted on the official account of Beijing Tencent News Technology Channel

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Mr. Son's SoftBank sold a 4.9 percent stake in Nvidia in 2019 for a return on investment of $3.3 billion, which is now worth about $160 billion.
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Son predicts that super AI, which surpasses human intelligence by 10,000 times, will be widely used within a decade to help solve challenges such as disease, car accidents, wars, and even meteor impacts on Earth.
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SoftBank is said to be planning a project called Izanagi, which plans to invest about $100 billion in the research and development of artificial intelligence-related chips.

Nvidia stock is sold early! Son missed out on a massive $150 billion fortune

Tencent Technology News According to foreign media reports, at the recent annual general meeting of shareholders held in Tokyo, SoftBank Group founder and CEO Masayoshi Son recalled some painful experiences in investment, especially that he missed the opportunity to greatly increase the value of Nvidia's stock, for which he missed out on $150 billion in potential gains. Son also talked about his pursuit of super artificial intelligence and plans to achieve this by continuing to invest more.

"The Big Fish Slipped Away"

Son is best known for his successful investments in the technology sector, but he still regrets missed opportunities when he looks back: "When I think about those missed opportunities, I feel a deep sense of frustration. A few years ago, I had to reluctantly sell Nvidia stock because SoftBank's investment vehicle, Vision Fund, decided that locking in returns was a necessary move. Alas, the big fish that slipped away is really sad! ”

In 2019, Vision Fund sold its 4.9% stake in Nvidia, earning a return of $3.3 billion. At the time, it seemed like a glorious victory, given that SoftBank had bought the shares at a cost of about $700 million. However, with the surge in demand for Nvidia's chips for AI applications, Nvidia's rise has only just begun.

Just last week, Nvidia topped the list of the world's most valuable publicly traded companies, and although it retreated slightly on Thursday to second place behind Microsoft, its market capitalization is still staggering. As of Thursday's close of trading per share, Nvidia's market capitalization was still hovering at $3.22 trillion, second only to Microsoft's $3.31 trillion.

Had SoftBank chosen to hold Nvidia's stake in the first place, the value of those shares would have soared to about $160 billion. This means that SoftBank's decision to sell Nvidia's stake in 2019 cost it more than $150 billion in huge gains.

Son also revealed that he had been interested in bringing Nvidia under his technology group. He recalled that a month after SoftBank bought British chip design company Arm in 2016, he had an in-depth four-hour conversation with Nvidia CEO Jensen Huang at his home in California.

"We only had one topic: 'I've bought Arm, and now I want to buy your Nvidia.'" Son recalled. He had hoped to buy Nvidia and take it private while keeping Huang at the helm, but the deal fell through.

In addition, Son also admitted that he had intended to invest in OpenAI, the maker of the AI chatbot ChatGPT, but unfortunately, OpenAI's co-founder Sam Altman ultimately chose to accept Microsoft's investment.

In 2022, Son's plan to sell Arm to Nvidia fell through amid monopoly concerns.

Two of the proudest investments

For decades, Son has been in the spotlight in the investment world. He is best known for his success as an early investor in Alibaba, a Chinese e-commerce platform, which injected $20 million in 2000. In 2014, when the Amazon-crowned giant went public, the value of Mr. Son's stake soared to $60 billion. Alibaba has created one of the largest initial public offerings (IPOs) in history, second only to Saudi Aramco.

Son used this successful investment experience as a cornerstone of his ambition, and three years later, he created SoftBank's Vision Fund. Never before had anyone dared to raise a huge amount of up to $100 billion for an investment vehicle and invest it all in disruptive technologies. With this unprecedented effort, the Vision Fund has invested billions of dollars in ride-hailing giant Uber, enterprise software leader Slack, and office-sharing pioneer WeWork.

In addition to Alibaba, Arm is also one of Son's most successful investment cases. SoftBank owns about 90 percent of Arm, which went public in the United States last year and was worth $168 billion as of Thursday's close. "If I were given another chance to choose between Arm and Nvidia, I wouldn't hesitate to choose Arm," Son said. I am confident in the future of Arm. ”

Arm's chip designs are widely used in most smartphones and will be key to the next generation of chips that support AI applications. Currently, Arm's stake is SoftBank's largest asset. As a result of this strategic investment, SoftBank's net worth surged by $126 billion in just one year to $214 billion.

After a series of investment setbacks at the Vision Fund, SoftBank went into "defensive mode" but now has a strong balance sheet and huge reserves. Son wants to continue investing in AI to maintain SoftBank's influence in the next stage of humanity's development. This month, SoftBank led an investment of more than $1 billion in Wayve, a British self-driving start-up, in Europe's largest AI deal to date. In addition, SoftBank is also in talks to acquire Graphcore, a British artificial intelligence chip maker.

Company executives hinted that SoftBank is preparing to take a more aggressive approach in the investment space, possibly ending consecutive quarters of slowing investment. At the end of March, the company's loan-to-value ratio fell to 8.4%, near an all-time low and well below the company's target of 25%. This metric is one of Son's key measures of whether the company has an appropriate balance of risks and opportunities.

Yoshimitsu Goto, SoftBank's chief financial officer, told investors at last month's earnings conference that SoftBank now has the ability to take on more risks given the acceleration of AI development. "Not taking risks is the biggest risk we face," he stressed. ”

Son painted in detail the huge opportunities in AI robotics, data centers, and autonomous driving, and stressed that SoftBank needs to seek partners to support this vision. He told shareholders that SoftBank needed to "look for the next big bet without worrying about whether it would be a success or a failure." ”

Super AI will be popularized within a decade

At the annual meeting of shareholders, Son talked about a term called artificial general intelligence (AGI), which refers to artificial intelligence that is smarter than humans. Son said the technology could be 1 to 10 times smarter than humans and would be realized in the next 3 to 5 years, or sooner than he expected.

However, Son added: "If AI is not much smarter than humans, then we don't need to change the way humans live, and we don't need to change the structure of society." But with the advent of Super Artificial Intelligence (ASI), things are quite different. With ASI, you'll see even greater progress. ”

Son imagines the future further by describing how ASI models can be made to work together and influence each other like neurons in the human brain. He firmly believes that this kind of interaction will make the intelligence level of artificial intelligence far exceed that of any human genius, and 10,000 times smarter than humans.

Son also predicts that within a decade or so, super-artificial intelligence will be widely used to help humanity solve challenges such as disease, car accidents, wars, and even meteor impacts on Earth.

Talking about his original intention to pursue super artificial intelligence, Son attributed it to a profound "epiphany". He shares his thoughts on how he longed to change the world in the limited time of his life. Mr. Son, 66, referring to his late best friend, Steve Jobs, admitted that in his frequent exchanges with Mr. Jobs, he often moved to tears because his achievements were insignificant compared to those of the Apple co-founder.

Over the past year, Son has experienced the death of his father and had an "epiphany" on an early Friday morning after struggling with a confused future direction. He said at the annual shareholder meeting: "I finally found the answer. This (super artificial intelligence) is my mission in this life. We've done a lot of things, but it's all just a warm-up to the dream of super AI. But he did not elaborate on his plans for the future.

It is understood that SoftBank is planning a project called Izanagi, which plans to invest about $100 billion in the research and development of artificial intelligence-related chips. Asked about the progress of the project, Son said: "I am committed to achieving tangible results and will work tirelessly to achieve the goals." But he did not provide further details.

Son's vision is closely tied to SoftBank's share price and cash reserves. In 2024, SoftBank's share price will continue to climb, driven by Arm's artificial intelligence technology. Faced with issues such as share buybacks, dividends, and stock splits, he said indifferently: "These issues are insignificant compared to the realization of a future driven by super artificial intelligence and human progress." ”

or privatize SoftBank

While Son is aggressively pursuing capital deployment and potential deals, there are some voices in the market calling for SoftBank to return the funds to shareholders. Most recently, Elliott Management spent more than $2 billion on SoftBank shares and pushed Son to implement a $15 billion share buyback program.

In the face of this proposal, Son showed an indifference to the buyback, emphasizing that his vision of artificial intelligence is the top priority. "Share buybacks, dividends — these are just trivial matters," said Mr. Son, who is convinced that the development and diffusion of technology will naturally increase shareholder value. He added: "You may be worried about whether SoftBank's share price will rise, but please forget about these trivia. What's really important? I have a dream to chase, please support me. ”

Son also warned that the possibility of privatizing SoftBank in the future will not be ruled out. "To be honest, I've thought about it in the past and probably revisit it in the future," he said. Our stock price is so overvalued that it has even been called a 'Son discount'. The road ahead is uncertain and I can't make any promises. I may buy back shares, I may decide to take the company private, or continue to operate in my current model. But no matter which way I choose, my goal is always to pursue the realization of super artificial intelligence. (Compiled by Golden Deer)

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