WeWork shares fell 32% in after-hours trading following the news. Shares have fallen about 96% this year.

New York-based WeWork is considering filing for bankruptcy protection in the U.S. state of New Jersey, the report said, citing people familiar with the matter.

WeWork declined to comment.

Earlier on Tuesday, WeWork said it had reached an agreement with creditors to temporarily defer payments on some of its debt due to expire.

As of the end of June, WeWork had $2.9 billion in net long-term debt and more than $13 billion in long-term leases, adding to the company’s troubles amid rising borrowing costs in the commercial real estate industry.

WeWork’s bankruptcy filing would be a stunning reversal of fortunes for the company. In 2019, the company was privately valued at $47 billion, a significant loss for investor SoftBank.

WeWork has been in trouble since a planned IPO failed in 2019. Investors are skeptical of its business model of leasing properties long-term and renting them out short-term, and are concerned about its huge losses.

WeWork’s woes did not ease in the ensuing years. Eventually, the company successfully went public in 2021, but its valuation dropped significantly. Japan’s SoftBank Group, its main backer, has invested billions in the startup, but the company continues to lose money.

In August of this year, WeWork expressed “serious doubts” about its ability to continue operating, and several executives resigned, including CEO Sandeep Mathrani.

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It is reported that Masayoshi Son, who spoke at the SoftBank World Corporate Congress today, believes that generative AI, such as ChatGPT, is rapidly evolving, and that he believes AGI will be 10 times smarter than the sum of all human intelligence in the future.

Previously, Mr. Masayoshi Sun also said that SoftBank is developing a Japanese version of ChatGPT, and made a statement that “if you can’t embrace AI, you’re losing the future”.

Sun is quite optimistic about the development of AI, claiming that he is a “heavy user” of ChatGPT, “almost every day” and ChatGPT exchanges.

Last month, SoftBank’s British chip design company ARM officially landed on the Nasdaq exchange, raising $4.87 billion, making it the largest IPO deal so far this year. On the occasion of the listing of ARM, Masayoshi Son once again said that he is a “faithful believer” in artificial intelligence, ARM is the “core” beneficiary of the artificial intelligence revolution.

At the shareholders’ meeting on June 21 this year, Masayoshi Son presented a slide titled “Evolution Speed,” which showed a chart of human evolution. From the birth of mankind to the agricultural revolution, the curve was completely flat until the transition from the industrial revolution to the information revolution, when it rose slightly. He said at the time that in the next few years, due to the development of artificial intelligence, the curve would rise steeply, with a slope approaching a vertical line.

▲ Image source Softbank

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Arm on Tuesday announced the pricing of the $52 billion initial public offering, which will be the largest such deal in the United States this year.

Arm said in a filing that SoftBank Group plans to issue 95.5 million American Depositary Shares (ADSs) at a price of $47 to $51 per share.

Arm will license its IP to Apple and many other companies, and Apple currently uses Arm’s technology to customize the design of its iPhone, iPad and Mac chips.

In fact, Apple was one of the first companies to partner with Arm in 1990, and then released the sadly unsuccessful “Newton” handheld computer in 1993, which was based on Arm’s chip technology.

However, the East does not shine, Arm technology, although not to obtain the favor of the computer chip, but due to low power consumption and a series of factors later gradually dominated the field of mobile semiconductors.

It is worth mentioning that Apple is also one of the first large technology companies to invest in Arm’s initial public offering. However, Arm’s public IPO filing on August 21 did not mention this transaction, which means that the deal was signed between then and September 5th.

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Sumer Juneja head of SoftBank Vision Fund’s investments in Europe, the Middle East, Africa and India, said in an interview that the company is helping its portfolio companies to adopt AI technology and has already arranged for the founders of these companies to meet with the top companies in this field.

SoftBank plans to have up to 20 founders of Indian companies along. The firm’s Indian portfolio companies include Oyo Hotels, online car company Ola and takeaway platform Swiggy.

Image courtesy of Pexels

SoftBank, helmed by Masayoshi Son, has always been active in the venture capital space, but it began restarting investments in the second quarter of this year after previously suspending them due to investor frustration with loss-making startups. The Japanese giant has more than $40 billion in cash and is currently raising more money by preparing for the IPO of chip design firm Arm.

“We don’t want the companies we invest in to miss the AI wave and wait until three years later to catch up.” Junija said, “Important factors we consider when investing in a new company include that it must have a best-in-class technology team and be in an industry that can utilize AI to make its business model more efficient.”

With ChatGPT catching fire all over the world, investors are now stepping up to back AI companies. Junija believes that a large number of companies in many industries, including SaaS, will become redundant if AI technology is not utilized quickly. However, the biggest challenge today is what it will take to capitalize on this technology.

“If you get in too late, you miss the opportunity. If you get in too early, you have a limited impact on revenue. Our role is to help businesses transition smoothly.” He said.

Masayoshi Son founded the Vision Fund in 2017 and has since invested more than $140 billion in startups as a way to support the development of new technologies such as artificial intelligence. But many companies, including shared office startup WeWork, have suffered plummeting valuations.

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IRL, a popular social media app for Generation Z that launched in April 2021, appears to be “one of the fastest-growing social media apps for Generation Z,” according to the suit, and SoftBank invested $150 million in IRL in May 2021 based on IRL’s low cost, strong user engagement, and good growth potential. In May 2021, SoftBank invested US$150 million in IRL (currently around RMB1.077 billion), including US$125 million in shares from the company and US$25 million in shares from CEO Abraham Shafi and other insiders. At the time, SoftBank believed IRL had 12 million monthly active users.

But the suit alleges that those numbers were false and that IRL secretly used a large number of bots to create what appeared to be a thriving social network, but was actually designed to “defraud investors”. The scheme began to unravel when the SEC opened an investigation into IRL in late 2022, and in April 2023, Abraham Shafi was suspended as CEO and the company was dissolved in June.

The lawsuit raised questions about the extent to which SoftBank scrutinizes its portfolio companies. When third-party evaluations of user data fell far short of the IRL’s self-promotion, SoftBank representatives accepted Abraham Shafi’s explanation that they were “absolutely inaccurate”. SoftBank has also made some missteps in the past, including taking large stakes in allegedly fraudulent cryptocurrency exchange FTX and devalued real estate company WeWork.

SoftBank’s Vision Fund has underperformed since the market’s high point in 2021, posting a full-year loss for the fiscal year ending March 31, 2023, of $32 billion.

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According to the official press release of the Softbank Group, the Softbank Group’s “Japanese version of ChatGPT” development is going smoothly, soft and hard companies are currently carrying out the AI training process, is expected to launch their own “Japanese version of ChatGPT” AI products next year.

In order to realize “this ambitious goal,” SoftBank will set up a wholly owned subsidiary, SB Intuitions, to focus on training generative AI, according to Junichi Miyagawa, CEO of SoftBank Group’s telecom division, who said SoftBank is also planning to partner with Microsoft to accelerate the process of landing the corresponding technology and provide a series of credible generative AI services to Japanese companies. Generative AI services for Japanese companies.

▲ Source: SoftBank Group

According to a Reuters report, Softbank has a team of about 1,000 people working on the “Japanese version of ChatGPT,” after Masayoshi Son said he chats with ChatGPT every day and spoke with OpenAI CEO Sam Altman, who has visited Tokyo a number of times this year to talk about how he hopes to utilize ChatGPT to develop a new generation of AI services. Altman, who has made several high-profile visits to Tokyo this year, hopes to capitalize on the interest in generative AI to make more of an impact on emerging technology globally.

And at the June 21 shareholders’ meeting, SoftBank’s Masayoshi Son presented a slide titled “Evolution Speed,” showing a chart of human evolution. From the birth of mankind to the Agricultural Revolution, the curve was completely flat, until the transition period from the Industrial Revolution to the Information Revolution, when the curve rose slightly. He also said that in the next few years, due to the development of artificial intelligence, the curve will rise steeply, with a slope approaching a vertical line.

▲ Source: Softbank

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For fiscal 2022, the Vision Fund lost 4.3 trillion yen ($32 billion, 221.02 billion yuan), compared with a loss of 2.55 trillion yen a year earlier. “The Vision Fund’s investment loss was 5.28 trillion yen, compared with a loss of 3.43 trillion yen a year earlier.

Despite the rebound in technology stocks this year, the overall performance is still lower than a year ago. In SoftBank’s 2022 fiscal year, the Nasdaq 100 index fell about 11%. Overall, SoftBank Group reported a net loss of 970.14 billion yen for fiscal 2022, narrowing from a loss of 1.7 trillion yen a year earlier.

SoftBank said that in the past year, the Vision Fund has made gains in exiting investments in well-known companies such as Uber. For example, it narrowed its overall losses by selling stakes in T-Mobile and Alibaba. SoftBank also sold off its entire stake in Uber last August. But it also lost money on investments in other companies, including GoTo, Indonesia’s largest technology company.

SoftBank’s chief financial officer Yoshimitsu Goto said today that its current investments are well-capitalized, with several companies poised to go public at a total valuation of $37 billion, without mentioning the companies by name.
In defense mode

SoftBank’s Vision Fund, which is the brainchild of company founder Masayoshi Son, consists of Vision Fund I and Vision Fund II It invests mainly in high-growth stocks. But in recent years, these stocks have faced resistance from rising global interest rates, causing investors to dump riskier stocks such as technology stocks.

While losses have been mounting, Masayoshi Son’s key ally and SoftBank executive Rajeev Misra resigned from some of his positions at the company last August. Misra, who played a major role in the early success of the Vision Fund, left just as SoftBank posted its biggest quarterly loss ever for the second straight quarter.

About a year ago, Masayoshi Son said SoftBank would go into “defensive” mode in the face of headwinds and become more disciplined in its investments. That strategy seems to have worked in the first three months of the year, thanks to a rebound in technology stocks. “The Vision Fund’s investment loss for the period was 236.8 billion yen, well below the previous quarter’s 730.3 billion yen.

SoftBank said it made $3.14 billion in new or follow-on investments in fiscal 2022, well below the $44.26 billion it made in the same period the previous year. At a press conference today, SoftBank CFO Yoshimitsu Goto also said it had been a “volatile” year, citing the collapse of Silicon Valley Bank and the acquisition of Credit Suisse by UBS.

In the first quarter, we may see some signs of improvement,” he said. But for these problems (financial system instability), no fundamental solutions are expected.”

Nevertheless, Yoshimitsu Goto also pointed out that SoftBank is making “significant progress” in artificial intelligence (AI) technology, for which the company is considering whether to continue to maintain a defensive mode. In this case, he said, “should we remain on the defensive or should we maintain a balance on the offensive?”
Spotlight on ARM IPO

Investors are currently looking forward to the upcoming ARM IPO (Initial Public Offering). Later this year, ARM will list on NASDAQ. Last month, ARM has secretly filed its application.

The ARM IPO will not only bolster SoftBank’s balance sheet, but may also provide it with more capital for new investments. In response, Yoshimitsu Goto said today that he could not discuss ARM’s situation in detail because the application had been filed in secret. But he said preparations for the IPO are “going well.

For fiscal 2022, ARM’s sales were 381.7 billion yen (currently about 19.619 billion yuan), up more than 27 percent year-on-year. Pre-tax profit was 48.6 billion yen (currently about 2.498 billion yuan), up 18 percent year-on-year.

To attract investors, it was announced in March that ARM plans to adjust its business model to increase the price of its chip designs in the hope of boosting revenue before the IPO. Last month it was also reported that ARM was building its own chips to demonstrate its capabilities in product manufacturing.

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Japanese Companies Restrict Use of ChatGPT

SoftBank warned employees last month about the use of ChatGPT and other business applications, saying, “Do not enter company-identifiable information or confidential data.” Although SoftBank has introduced guidelines for the use of cloud services such as interactive artificial intelligence, the rules continue to be repeated in light of the increased attention chatbots have received recently. SoftBank plans to create rules that dictate which businesses can use the technology and which applications can be used.

On March 1 of this year, ChatGPT developer Open AI released an application interface that allows businesses to pay to integrate ChatGPT into their services. Open AI says the data collected from ChatGPT will not be used to improve performance, but its website indicates that when the service is used for free, “we may use the data you provide to improve our models. In this case, the information being entered, such as products being developed, can be used to answer questions from other companies.”

In addition to SoftBank, Hitachi will consider new ethical rules to govern the use of interactive AI and whether data is being used correctly. The company plans to refine guidelines for the use of artificial intelligence set for 2021.

Fujitsu last month briefed employees on legal and ethical issues related to ChatGPT and other interactive AI services, including information protection. The company has established a department to determine the use of AI. in February 2022, Fujitsu established a governance office to address ethical issues in product development and commercial use that include AI. Through this office, the company will alert the public to the risks of interactive AI.

In January, ChatGPT surpassed 100 million users just two months after its launch. Microsoft’s integration of ChatGPT into Bing search last month pushed the search engine past 100 million daily users for the first time a month later. And the use of this technology in enterprise operations is expected to grow significantly as well. However, the growing use of interactive AI by people and businesses is also a concern, as the technology could spread false information and trigger data breaches, leading some companies to ban its use.

Japan’s Mizuho Financial Group, Mitsubishi UFJ Financial Group and Sumitomo Mitsui Banking Corporation have banned the use of ChatGPT and other services in their corporate operations. Mizuho’s restrictions prevent employees from accessing the site from their work terminals in order to “prevent the leakage of important information such as customer and financial transactions due to improper use by employees.” IT company NEC has also banned employees from using ChatGPT.

Atsuhiro Goto, a research professor at Japan’s Graduate School of Intelligence and Security, said, “The ease with which interactive artificial intelligence can be used on personal computers makes employees less cautious, and there is a risk that confidential data could be accidentally entered and used outside the company. These services should be tested by a dedicated internal team to clarify the rules of use and the information that can be entered.”

Panasonic Connect, a Panasonic Holdings group company, began using interactive artificial intelligence to create documents after taking steps to prevent data breaches and other problems. To reduce the risk of data breaches, the company reached an agreement with Microsoft, a co-developer of the software, not to use the content for secondary purposes such as AI training. At the same time, employees were warned not to enter personal information.

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ARM said last week it would only seek a separate U.S. listing this year, dashing hopes that the British government would want the tech giant to return to the London Stock Exchange.

SoftBank has picked four investment banks to lead what is expected to be the most high-profile stock listing deal in recent years. Goldman Sachs, JPMorgan Chase, Barclays and Mizuho Financial Group are expected to be the lead underwriters for ARM’s IPO, but no bank has yet been selected for the coveted role of “lead manager” (lead left), people familiar with the matter said.

Sources close to the matter said ARM is expected to launch IPO preparations in the US in the next few days, with a valuation range yet to be finalized, but ARM is hoping for a valuation in excess of $50 billion during the share sale.

ARM, Goldman Sachs and Mizuho Financial Group were not available for comment. SoftBank, JPMorgan Chase and Barclays have not yet responded to requests for comment.

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According to the report, the researchers have extended the battery life up to twice by inserting a sheet made of solid electrolyte between the positive and negative electrodes to protect the lithium used in the negative electrode. The team will further promote the extension of life, and strive to achieve practical use as a power source for drones, etc.

With the support of the Japan Science and Technology Agency (JST), NIMS has been working on basic research on high-weight energy density lithium-air batteries. They jointly established the NIMS-SoftBank Advanced Technology Development Center with SoftBank in 2018 and have been working on practical applications of lithium-air batteries since then, and later developed a lithium-air battery with an energy density of 500Wh/kg per unit weight in 2021, but this development had a cycle life of fewer than 10 cycles and was simply not worthy of production.

Initially, the researchers added a protective film to the lithium-air battery, but the 90-μm-thick solid electrolyte was a very heavy material, which in turn led to a lower energy density.

Therefore, they subsequently developed a solid electrolyte with a thickness of 6 μm and applied it to the lithium-air battery as a protective film for the negative electrode. The prototype lithium-air battery weight energy density in excess of 400Wh/kg (more than twice that of conventional lithium-ion batteries) can also guarantee a stable charge and discharge response for more than 20 cycles.

Although this means that the application of lithium-air batteries is a big step forward, compared to the theoretical life of 800 cycles of ternary lithium batteries, more than 2000 times the lithium iron phosphate is not enough to put on the market, even if it does have a much higher energy density.

△ 6 μm thick solid electrolyte film Source: NIMS

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