Following the news that Softbank, the world’s biggest tech investor, lost more than $27 billion in the last fiscal year;

David Bicknell, Principal Analyst in the Thematic Intelligence team at GlobalData, a leading data and analytics company, offers his view:

“Softbank needs to reset its tech investment radar, and robotics is the way forward. CEO Masayoshi Son has indicated as much in the past. In doing so, Son would be following in the same footsteps as Elon Musk, who has said robots will be a bigger business than cars for Tesla.

“Despite losing money, Softbank remains the benchmark for tech investing. Where it heads next, others will follow. Japan’s natural affinity with robots provides a strong home market for Softbank to explore robotics’ investment potential. There are other areas that are, for now, no-go areas. Son has lost millions of dollars on crypto in the past and should let others in Silicon Valley wrestle with that monster.

“Another key decision for Softbank is where to float chipmaker Arm. New York should still be the destination, despite the UK government’s keen lobbying. The state of today’s economic landscape and the fallout from the Russia-Ukraine conflict means Softbank must bet on more investment certainty. That’s more likely to be in New York than London.”

Mike Orme, Consultant Analyst in the Thematic Intelligence team at GlobalData, offers his view:

“The robot angle is fascinating. Last September, Son stressed the potential for what he called ‘smabos’ – smart humanoid robots – to ramp up Japan’s growth and competitiveness. And yet, as he was announcing robotics’ potential, he was pausing all activity in Softbank’s much-hyped dancing, door-greeting semi-humanoid Pepper robot, which had been launched amid much ballyhoo in 2014 but which never scored in the global market.

“Son stressed that AI developments in a variety of other Softbank companies are directly applicable to robotics and have raised the game way above Pepper for more serious industrial and domestic applications. But, with Toyota, Honda and Sony all in the market and Musk arriving too, Son will need a strong unique selling point if he is aiming to launch a Softbank ‘smabo’ to succeed Pepper, rather than be a strategic investor in a robot company just as he was and remains in Arm.

“Remember, Son bought mobile robot leader Boston Dynamics from Google in 2017 only to sell a controlling stake in it to Hyundai last summer, albeit with a strong collaborative partnership agreement in place.

“On Arm, he is targeting a $60 billion valuation for any IPO, probably next year. This might seem a bit rich for a company with current annual revenues of only $2.5 billion, but it’s hard to overestimate the significance of Arm technology to the semiconductor industry. It goes way beyond smartphones and wearables, as Nvidia could clearly see, and Son himself still sees as he insists that he will retain a majority stake in the post IPO Arm.”