Navneet Govil of Softbank

Welcome to the Puck Venture Capital and Beyond, the show that examines the changing landscape of our world. We'll have candid conversations with VCs, entrepreneurs, and thought leaders grappling with our current challenges and providing solutions to key problems we face as a nation. I'm Jim Beer, president of CMBG Advisors. This podcast brings change makers to the table to discover the inner workings behind their decision making strategies and ultimately how they got to where they are today. We need to recognize that AI is a once in a generation technology that has massive potential, and we're still in the very early stages of the AI revolution.

On today's episode of the Puck, I have the pleasure of sitting down with Navneet Govell, executive managing partner and chief financial officer at SoftBank's Vision Fund. Govell shares his insights as a leading financial officer of over thirty years, investing in cutting edge technology and financial startups, culminating in guiding SoftBank's Vision Fund with assets under management of over a $100,000,000,000. We discussed where the current economic climate is headed, the way SoftBank is harnessing the power of AI, and Govell's recommendations for portfolio companies looking to IPO. There's a lot to cover today, so let's get to it. We are excited to have you here, Navneet Govell.

Welcome to the puck. Thank you, Jim. One of the things I love to do when we get started, Navneet, is just to kind of give our listeners a little bit about your background and how you came to SoftBank. Sure. So I've been very fortunate.

I've, had the privilege, for working in some companies that have been at the forefront of technology trends and fast growing high growth environments. In the nineties, I was with Pfizer when they were launching growth drugs like Lipitor and Zoloft. Then in the early 2000s, I was at Sun Microsystems. You may recall they used to call it the .and.com. They used to sell UNIX servers And then later, I joined, SunPower, which is a leading solar manufacturer.

This is when clean tech and renewables were the next big thing. So I joined the SoftBank in 2016. I've been here eight plus years now. And at the time, I was really impressed by our founder Masayoshi Son, we refer to him as Masa, as a visionary with incredible foresight for spotting technological trends. And it turns out it coincided with Saudi Arabia opening up its economy and diversifying under MBS at that time.

So these two seemingly unrelated developments led to us raising a $100,000,000,000 fund, Vision Fund one, which has been my primary focus for the last eight years. Wow. Well, you know, people talk about billion dollar funds. They talk about $100,000,000 funds, but a $100,000,000,000 fund is certainly a lot of responsibility For people who may have a variety of familiarity with SoftBank, can you take a moment and walk us through the history of the company? Sure.

So our founder, Masa, has this unique ability to see around corners. You know, he foresaw the PC revolution, the Internet revolution, mobile revolution, and now the AI revolution. So it was in 1981 that he founded SoftBank when he saw the PC revolution and founded SoftBank to distribute software. Then during the Internet revolution, he invested $20,000,000 in Alibaba, which we have since monetized for $80,000,000,000. And it was during the mobile revolution when he acquired Vodafone Japan in 2006 and Sprint in 2012.

But more importantly, one of the things your audience may not know is that he partnered with Steve Jobs at Apple to introduce the iPhone to the Japanese market. And it was only after the success there that a lot of the other telecom carriers like Verizon and AT and T started carrying the iPhone in The US and in other markets, and it really took off. And he foresaw the emergence of AI in 2016. And this is when we had acquired Arm in 2016 for 32,000,000,000. And this subsequently raised the vision fund, the $100,000,000,000 vision fund, and have been investing in that over the last seven years.

So we've now invested about a $150,000,000,000 in 475 companies. And today, manage three funds, Vision Fund one, Vision Fund two, and the LATAM Fund. Wow. Impressive. And when you talk about your history there, how would you define and describe your current role for our listeners?

Sure. And as you said, Jim, you know, even though the magnitude was large, for us, it was like being at a startup. So I remember when I first, went to set up our London office, you know, I was involved in buying furniture for setting up the funds. So while we were the largest fund, we operated like a start up and went through a lot of the challenges that a lot of entrepreneurs and founders go through. But my focus has primarily been on serving three constituencies.

The first is our investing team. And over the years, we've made over four four hundred investments. So we have a lot of data on our portfolio companies and to really see what heuristics, you know, work and don't work and how we can support them. The other is the portfolio company founders and CFOs. And the third has been our limited partners.

So in terms of portfolio company founders and CFOs, it's really helping them prepare their companies for an IPO or an exit. Because as you know, we're late stage growth equity investors. So how can they build forecasting capabilities, embed robust controls, and ensure they have positive unit economics so they can go public? Then the third constituency is our limited partners. For them, they wanna see the entire investing life cycle, not just in deploying dollars but when are they going to get their money back, how do we return money to them.

And in our first fund, we returned over half the capital thus far. So fast forward to today, in addition to serving those three constituencies, responsibility for the finance function and a couple of other functions and sit on our investment committee. So as we're talking about managing the three different roles you talk about, obviously, your time is limited. And when we have you on the show today, which we're grateful for that, in terms of this time and your opportunity to talk to the world in terms of what's going on at SoftBank, what prompted you to wanna tell the story today? A number of things.

I think SoftBank, unlike other VCs or private equity firms, it's not well known. Definitely not well known outside of Japan. And if you look at the history of SoftBank, we used to be an operating company. SoftBank had acquired Vodafone Japan. Then it acquired Sprint in 2012.

For a period of time, people thought we're a telecom company. In fact, today, a lot of equity analysts that cover us are telecom analysts. And what has happened is over the years, we have shifted from being an operating company into a pure investing company. Today, we have three funds, Vision Fund one, Vision Fund two, the LatAm funds. And I think because of the nature, you know, the high profile from raising our $100,000,000,000 fund, the media has covered some of the investments that haven't quite worked out well, like we were, but haven't really focused on investments that have worked out.

So I think this is a great opportunity to talk to you, Jim, to tell you about what is our investing framework, what do we focus on, what are things that have worked out well, and why they have worked out well, and the investments that haven't worked out well, why haven't they? So that makes sense. Obviously, as you said, there were more well known stories like the WeWork story. But when you're looking at past investments across the board, what have they looked like, and what are the guiding principles that have backed up that investment strategy? Yeah.

First and foremost, our investing mandate is to invest in leading technology companies where artificial intelligence or AI plays a central role in a company's products and core operations. We're sector and geography agnostic. You know, we've invested in everything from neobanks to robotics. And our primary framework is to focus on four things. One, the quality of the tech stack or the AI stack.

The other is product market fit, you know, focus on unit economics and founders management execution track record. So some of the companies that we've invested in are companies like Backdense. I'm sure your audience is familiar with them. They're the parent of TikTok, Uber, DoorDash, Coupang, which is the Amazon of South Korea, Flipkart, the Amazon of India, Revolut, leading fintech neobank in Europe, Garden Health, which focuses on cancer test diagnostics, and then others that haven't quite worked out as well like WeWork. So SoftBank has done so many amazing investments, and it's it's got a very sophisticated approach.

But we can't dodge the fact that people have asked questions about WeWork. What do you wanna tell us about what happened, and did it deviate from your investment strategy? What's your story with respect to WeWork? So WeWork and I'm sure everybody recognizes this. The concept makes a lot of sense.

Flexible workspace. Now, you know, whether it's startups and founders that wanna co work with other startups, other founders, other companies, you know, it's hard to get long term leases. You don't know how fast the company is gonna scale. So that concept makes sense for a lot of startups, but it also makes sense for large established companies, fortune 100 companies, which their job is to sell products and services, not really invest in facilities or real estate. So the concept made sense.

And Adam Neumann is and was a larger than life character who grew the business from absolutely nothing to being the largest leaseholder in Manhattan. And what would happen is in those days, you know, when we initially invested in 2017, I remember they were doubling memberships every year. They doubled memberships in 2016. They doubled memberships in 2017. They doubled memberships in 2018 yet again.

I remember when WeWork would enter a certain building, we would hear about how the real estate price of that building had gone up. So there was so much momentum and hype around that. But what happened? They were basically pursuing growth at all costs. And they weren't really adhering to the mantra of nail it and then scale it.

You know, we always tell them, get the unit economics right and then you scale. And it seemed like in their case, it was growth at all costs and it didn't work out. And then, of course, there were also corporate governance issues which have been well documented. So there's a variety of things that didn't work out in the case of WeWork. So that's interesting because, you know and this is an opportunity for you to tell your story because some people have intimated that SoftBank would push for growth for all costs, so to speak.

And it sounds like you're saying that, no, we've always focused on fundamentals and getting it right first. And so when you look at your wins and losses and so forth, how has that approach been to getting those basic things down right? Yes. I think it's a number of things. We shouldn't forget.

Number one, you know, for us, being AI led has to be the primary focus. The other thing is unit economics really matter. You have to nail it and then scale. The other thing is corporate governance cannot be put on the back burner. It's important.

So what we tell our portfolio companies is that even private companies should operate as though they were public. You know, you need to have the same operating standards, financial discipline, corporate governance. Those things are just as important. They don't suddenly become important when you're a private company and, you know, you're reporting in that world and you have a board of directors, etcetera, etcetera. It's relevant when you're private as well.

So here's what I find fascinating about this. We're gonna talk about the state of the union, and I wanna get your take on the state of the investment market. But one of the things that we're talking about right now are certain principles that have essentially been part of our capitalistic system for a long time. And there there's always the balance between laissez faire and regulation. But you're talking about real checks and balances and bringing those back into practice because it sounds like, again, with all the easy money that went on for many years, in a sense, it led to essentially some bad habits developing and so forth.

So I wanna spend a little more time on that as we move forward. But first, before we do, why do you think it's becoming more important now, and how does that relate to the state of our investment market today? A couple of things on that, Jim. I think one is you're absolutely right. I mean, if we look at the last couple of decades, there has been very low cost of capital.

So what does that mean? That means any idea can get funded because capital is looking to be deployed. And, you know, if I look at post COVID, we saw peak market valuations in 2021. And after that, that was followed by inflation as well as rising interest rates. That in turn meant that the cost of capital went up.

And because the cost of capital went up, we saw a reset in valuations. Reset in multiples of both public companies, private companies, but a reset of valuations. And this has now led. We're in a new era of higher cost of capital. That means investors are now more discerning.

They're not just solely focused on growth. So even if you look at companies that went public, if I look at some of the most recent companies that went public like in 2023, ARM from our portfolio, but there was also Instacart and Klaviyo. But if I look at Instacart, Klaviyo, ARM, ARM did really well since then. Today, you know, we acquired ARM in 2016 for $32,000,000,000. At that time, we paid a 40% premium.

And people were saying, oh, you're crazy to pay such a large premium for ARM. Today, ARM is trading for over a $130,000,000,000. Instacart and Klaviyo, those investments haven't done so well. So I think where we are is investors are more discerning. There's a greater focus on profitability and unit economics.

So in this post COVID world, you touched on for a moment inflation. But when we look at inflation, and you also mentioned, I think, that you think we're in a more high rate environment, help us understand geopolitics and the role of government debt in terms of inflation and where you see rates going. Again, at the Puck, we're trying to look forward, and I won't hold you to this, but from your perspective, when you're looking at these issues, how do you describe that? So there are a couple of things. I mean, interest rates, I think, Jim, are more relevant for fixed income investors.

So like a PIMCO or somebody like that. We're growth equity investors and, you you know, we have 475 plus portfolio companies. They don't have that much debt in our funds as well. You know, we don't have that much debt. Now, of course, it's relevant in the sense how you value these companies, what the valuations are, what our entry valuations are, and at what valuations are we gonna be able to exit, what's a realistic IPO valuation, and things of that nature.

But I think, ultimately, it's more relevant to fixed income investors than it is to us. However, recognizing that and recognizing that we operate in a number of business and economic cycles, what we try to do to insulate ourselves from these types of things is to have a relatively long life for our funds. Our funds in general are anywhere from twelve to fourteen years. We're now seven years into this. So that gives us, you know, ample time.

If you look at a lot of other VCs, their fund lives are five to seven years. So they start putting a lot more pressure on companies to exit, and they may be more prone to changes in interest rates depending on when those exits happen. So for us, you know, if you look at the last I think on average, there've been 300 IPOs a year until the last couple of years where it has really dried up. And for us, that's not so relevant because, again, we have seven more years in our first fund to go. So we try to hedge ourselves by having these longer lives for the funds.

We have a diversified portfolio across sectors and geographies. So that's how we think about, you know, how to manage all of this. So I understand from your perspective, managing the investments, what you're focusing on. But one of the things we've tried to do at the Puck is understand macro issues because they affect the overall economy and the growth rates and ability to track capital and so forth. And one of the major changes, I think, in terms of the world in the last fifteen years is that the level of worldwide debt has grown dramatically.

I have to believe, and we've really spent a lot of time talking about this, that this is going to change dramatically certain trends that we're all going through. And there's a lot of young people out there that haven't lived through these different cycles. So when you look at the different cycles, like the Fed dealing with quantitative easing and now quantitative tightening and so forth, how did those things impact you at SoftBank? Again, I think it really goes back to the cost of capital. We welcome it.

I think, going from a period of quantitative easing to now quantitative tightening is welcome because you in a higher cost of capital environment, you're not gonna have any random idea getting funded. Investors are more selective, more discerning. Companies that are gonna go public and institutional investors are gonna focus on not just growth, but profitability as well. We have seen some kind of a correction in asset valuations in 2022. We're now in a phase where because there aren't enough exits, you have a number of VCs.

The funding environment remains a little fogged. There aren't that many new companies being funded or at higher valuations. So our portfolio companies and other private companies have had to pivot to what we call capital efficient growth, where it's like, okay, we're now gonna diversify from this growth area to another growth area or introduce a new product or service, but let's focus on what our core competence is. Let's preserve the cash runway, see how much of the runway we can extend, but while maintaining growth. So I think all of those things, I welcome them and we welcome them in terms of moving to a tighter funding environment, both from the Federal Reserve as well as from institutional investors.

Okay. So moving into the macro environment for a second, let's talk China. What do you see going on in China today? There are a couple of things going on in China. I think we're seeing classic demand side weakness, which is driving deflationary pressures and slowing growth.

And also if you look at their stock market, the stock market there has underperformed a number of global peers. And I think there are two really underlying reasons there. One is weak real estate sector and there have been some prominent bankruptcies such as Evergrande, I think Country Garden's bond to fall and the other thing is elevated unemployment especially amongst the youth. Having said all of that, my view is you know we shouldn't bet against China for a number of reasons. The first is it's the second largest global economy.

They have a track record of innovative companies. Companies like Tencent, Baidu, Alibaba, BYD in terms of electric vehicles. Electric vehicles twenty years ago didn't really exist and now most of them are coming from China. And they are an AI powerhouse just behind The US. And you can see that in terms of the number of scientific journals that get published there, citations, number of AI researchers.

So we're seeing that it's a very promising market. Of course, it's gone through regulatory changes and that creates a number of uncertainties, but I wouldn't bet against China. And I think that's wise advice. It's the China's been around for a long time. In terms of short term, though, when you look at what's going on with their real estate crisis, and I realize crisis is a loaded word, but it is having some real challenges.

Do you think we're gonna feel the ramifications of what's going on in their deflationary real estate market right now? It's hard to predict and, you know, we tend to take longer term view. And, again, it goes back to the life of our fund. That's where I think we have an advantage relative to some of the other investors. We're long term patient capital.

You know, we have a number of companies we've invested there. You know, companies like Bytedance, Didi. Didi was impacted by some of their regulatory actions, full truck alliance. But I think Didi, similar to Uber in The US, has significant upside potential there. So overall, I think it's hard to predict what happens in the near term, but long term, we remain bullish.

That's helpful. And switching now to that staying kind of in these larger economies, what do our listeners need to better understand about India, for instance? India is a very unique market and to some extent has been not so impacted by a lot of these global cycles and changes globally. A couple of things to note there. If you look at the last ten years or so, they have experienced about roughly 7% annual GDP growth.

And more importantly, there's a growing middle class and the tech market has significantly under penetrated. So I'll tell you what I mean by that. If you look at the tech sector in India compared to the total market cap, it's about 10%. Whereas in The US, it's 25%. Even in China, it's more than India, it's 17%.

Their middle class is about 40% of the population and it's projected to grow rapidly. So with that, and I would say that the market has strong support from both domestic and foreign investors. We, over the last seven years, have deployed about $12,000,000,000 in India in 25 companies and there are a number of companies there that are really well positioned to do well. Okay. And so we've got dynamic things going on both in China and in India.

We've got an election coming up in The United States. I'd be remiss if I didn't ask you in terms of where the puck is going. What is your 2024 prognosis? So what we believe is we're moving from the age of computing to the age of artificial intelligence. Technology is shifting from calculate, memorize, search to infer and create.

And, you know, there's been a lot of momentum in generative AI, but our view is that AI is broader than generative AI. There's a lot more than that. And I think in our case, we invested in Arm in 2016 because we believed at that time the AI revolution was upon us and that one of the keys to the AI revolution is going to be computing power. And Arm, just like Nvidia, where Nvidia focuses on the data centers and Arm is on the edge computing side, is gonna be key to providing that compute power. And we're beginning to see that.

You know, having that vision, that conviction and the patience is finally paying off. A $32,000,000,000 acquisition seven years ago today is trading at more than a $130,000,000,000 So we believe we're now at a stage where AI is going from excitement into execution. Then in terms of some of the other things you refer to in terms of the market, I think couple of things. The IPO market has to reopen at some point. I believe NASDAQ CEO, Adena Friedman said there are 85 companies that have filed to list on the NASDAQ.

So I think at some point that's gonna happen. We're also seeing in terms of our portfolio a lot of strategic m and a where companies are looking at this opportunity to consolidate, build market share, and really strengthen their position before they they look to list in the public markets. And then I think in terms of the overall macro economy, which is hard to predict because it's also driven by geopolitical situations. I think finally, if I look at inflation numbers, they used to be over 9% and they seem to are now in the 3% range. Housing costs remain a sticky contributor to inflation.

So I would say, you know, soft landing in The US is still the base case, but we feel excited because, overall, we think AI is really moving into this execution phase. When you talk about the execution phase, I know that with technologies, for instance, including things like self driving cars, some things go quicker than we expect and some things have taken longer. What's your thought in terms of this next stage with AI? Are we gonna be surprised? Is it this execution stage gonna go faster than people expect?

I think technology cycles take decades to play out, not even months or years. But I think what's more important is it's driving a lot of increases in productivity. You know, I think it's not just on the technology side. I see it, you know, in finance, in legal, where people are using a lot of artificial intelligence to increase productivity and really deliver higher value to customers. So, you know, I think we really need to look at this in terms of playing out in decades.

The other thing is the VC ecosystem is one giant flywheel. So without IPOs and m and a, VCs cannot return money to their investors. And then the lack of distributions mean raising capital for new funds is challenging. So with less new funds or even the ability to recycle from exit events like IPOs, we'll see the downturn in VC funding continuing. But overall, my view is that within generative AI, we expect the space to continue to generate significant interest.

In fact, if you look at 2023, a third of all VC dollars went into AI companies. So there is definitely a herd mentality where people run into things, and AI is clearly the hot area right now. But let's circle back for a moment to what you said before, which was that these fundamentals are starting to work their way back in, where people are starting to really look at what makes a company long term successful. As someone who sees from 30,000 feet the worldwide investment market, it sounds like you're obviously very excited about the long term future of technology and SoftBank and so forth. But there are macro trends.

And as we move back into this more, what I would call sustainable slash conservative environment, right, there's gonna be winners and losers. I guess, could you help us from a financial perspective understand, will there be pain involved as some of these companies and other funds out there that maybe got the memo too late? What will that adjustment be like as we're looking at the overall market? So I think a lot of VCs are giving the same message to their portfolio companies as we are. So I'll tell you what I think we see as, you know, the keys to success or how can founders navigate this kind of environment.

The first is what we're telling our portfolio companies is focus on capital efficient growth. You know, hope for the best, but prepare for the worst. So within our portfolio, we're seeing there's a strong focus on growth. You know, over 60% of our portfolio is growing their top line by over 25% year over year while at the same time, they have reduced their cash burn, you know, on median by about 41%. So finding the right balance between growth and preserving cash.

The second is we tell them focus on developing a best in class tech stack because that is what really gives you a competitive advantage. The other is find your product market fit. So one of the things we pay particular attention to is sales and marketing expense. If the sales and marketing expense is too much, it could be a sign that you don't have the right product market fit. The other is positive unit economics.

They need to really focus on positive unit economics from the very start. So nail it and then scale it. Not, oh, I'm gonna gain market share. There'll be economies of scale and then eventually I'll be profitable. No.

And then, you know, that was the example we talked about in terms of WeWork and have a relentless focus on execution. The other is, I mentioned earlier, which is focus on core features. Don't overhire engineers for superfluous product features. And the other is, you know, be sure to select good partners on your cap table. What we tell our portfolio companies and one of the advantages we have is we can support a company throughout its life cycle from the time we invest, whether it's series b, series c, all the way through to an IPO.

You know, we did that with DoorDash. We did that with Coupang. We made initial investments, and then we did a number of follow on investments. And from our side, we're open for business. So we're looking to partner with companies that are doing all of those things and invest in the next generation defining companies.

Totally makes sense. And partnering, obviously, with somebody like SoftBank with the relationships and the history that you have gives companies competitive advantages. When you're looking at things that have changed, I remember going back to 2009 when people were doing early stage investing that there was very little appetite for lenders to lend to these companies that were not yet sustainable, so to speak. And I think one of the shifts that I've seen in the last five years is that companies were able to get debt not based on sustainable EBITDA, but the idea that there'd be somebody else that would fund it or they had the revenue growth that we're talking about. When you're trying to look at your capitalization and how to set yourself up going for success over the next few years, How do you see the relationship between an investment by a SoftBank, for instance, or another VC in the role of debt?

How do you see that changing if at all? Yes. And I think if you look at the last couple of years, you know, post COVID, post the market peak in 2021 when a lot of companies were seeing down rounds. At that time, a lot of companies, and we encouraged a number of our portfolio companies to look at debt. Because do you really want to do a down round where it impacts the morale of the employees, employees that have stock in the company?

Would it result in greater dilution? Things of that nature. So some form of debt, whether it's straight debt, convertible debt could make sense. And, you know, one of the advantages we have at SoftBank is because we are sector agnostic, geography agnostic, and, you know, have a lot of capital to deploy, you know, we would look at different structures as well. They could be pure equity structures.

They could be structured types of, capital that we provide. And we can do that throughout the life of the company, the journey that they're on. Whereas, you know, you have a number of other funds that are either only debt only funds or equity only funds and they don't have that kind of flexibility. So we can advise our companies to choose what's the right capital structure for them. They obviously don't wanna be overly levered.

If they are gonna take on debt, they should make sure they can service the debt. So they are generating cash and they can service it. It's not an exorbitant cost, but they have to weigh the pros and cons of that with the the cost of equity that they would get. And I think, again, us having the flexibility and being able to support a company through its life cycle allows us, we would like to think, to be better partners for a number of these companies that are looking to raise capital. Makes total sense.

When we're looking at AI and you were talking about technology cycles taking longer periods of time than people might imagine, and you look at the excitement that's going into AI and the tremendous success some of these new companies are having, do you think we're in a bit of a bubble right now? And how serious a bubble is it? Recognizing that AI is here to stay, but is there some irrational exuberance that's gonna have to work its way through the market? So a couple of things there, Jim. You know, one is we need to recognize that AI is a once in a generation technology that has massive potential.

And we're still in the very early stages of the AI revolution. You know, current disruptors can themselves be disrupted. So for example, I mean, if you look at PayPal, PayPal only exists because of eBay, but is now worth three times as much as eBay. The other is, you know, if you look at GPS technology, global positioning technology, this was groundbreaking at the time. But it wasn't really significantly monetized until the iPhone came about and then later you had disruptive apps like DoorDash and Uber.

So I think we're still in the very early stages of it. Yes. There could be some, you know, valuations in terms of generative AI. So if I think in terms of generative AI and if I look at who have been some of the investors, you know, lately or more recently, they've been strategic investors. They're not financial investors.

You know, they are they're companies like Microsoft, Google, and a bunch of others that are making these strategic investments. You know, Microsoft and OpenAI, Google and Anthropic, NVIDIA and Cohere. But, I think we need to recognize that a lot of what's been happening there is driven by strategic investors as opposed to financial investors. And staying with your expertise and what you're seeing in AI, and you're talking about generative AI, and I think our listeners to a large extent because of their experience with chat, GPT, and otherwise, are we're all more familiar with generative AI and what it's doing, and it's gonna continue to get better and better, so to speak. And we're also seeing the the missteps, obviously.

What types of if you can draw a picture for us, what types of companies and things are you excited about that for the average person that's not really in the know? What do you see coming down the pike in the next few years that's gonna be exciting? Yeah. So in terms of AI, we think of it in terms of three buckets. We put it in the hardware bucket, applications, and infrastructure.

And the the question there is where will value really accrete? Where are we gonna see that? And I think, you know, when it comes to infrastructure, it's really empowering the developer community to train, fine tune, and deploy models. So, you know, there are a couple of companies in our portfolio, you know, that I would mention. One is Labelbox.

It's a model foundry that allows rapid experimentation with AI models from all major closed and open source providers. There's another company called Redis Labs, which is a developer of an open source in memory data structure platform that allows enterprises to manage their data in real time. So so those are kind of what we think of in terms of the infrastructure layer of AI. Then if you look at the applications layer of AI, that's fostering new digital behaviors and disrupting traditional industries. Some examples that come to mind, which I think many people are familiar with ByteDance, TikTok.

So that has the AI algorithms that power personalized content recommendations across a diverse portfolio of social platforms. We have a fintech company, PayPay, in Japan that detects fraud, onboards new users and merchants, and analyzes user activity trends and communicates with customers using AI powered tools. There's another company, Pixart, which offers AI powered text to image art generation tools. So that's what I would say. It's really hardware, infrastructure, and applications.

Those are the areas of focus or those are the buckets within AI that we're looking at. Terrific. I know we talked about the 24 prognosis. So wrapping this up, in terms of your outlook, in terms of where the world is going, where the puck is going, what final thoughts do you have for us, Navneet? Jim, thank you for having me on your podcast.

I really enjoyed speaking with you. We have a lot to look forward to in 2024 and beyond. We truly believe that AI companies are being built and invested in that are gonna be generational defining companies. We at SoftBank are open for business. SoftBank has over $30,000,000,000 of cash on its balance sheet.

We would love to partner with founders and entrepreneurs that are gonna build the most AI disruptive companies. So thank you. Thank you for having me on your show. Well, thank you for being available. We know how busy you are, and this is a wonderful opportunity for people to get a little more of an inside look into an amazing firm and a wonderful history, and we really, really appreciate your time.

Thank you. The The Puck Venture Capital Beyond is produced by CMPG Advisors. If you enjoyed the conversation today and haven't yet subscribed to our show, you can find us on iTunes, Apple Podcasts, and SoundCloud. Feel free to leave a review while you are there and maybe even a five star rating. Thanks for listening.

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