SoftBank, the Japanese investment firm, is continuing its aggressive investment drive in artificial intelligence (AI) by leading a $280 million investment round for US-based location mapping company Mapbox. Social media giants like Facebook and Snapchat have already utilized Mapbox’s cloud-based location data.
Mapbox, founded in 2011, has previously raised over $360 million through multiple investment rounds, including funding from SoftBank’s Vision Fund in 2017. With this latest investment, Mapbox’s valuation has reached $1.2 billion as of April 2020.
The CEO of SoftBank, Peter Sirota, has expressed plans to use the funds to enhance Mapbox’s AI software. Specifically, the focus will be on improving the software’s interaction with cameras and other vehicle sensors. The advanced AI software’s ability to process new information will be crucial as vehicles become more autonomous.
This investment from SoftBank is part of a broader trend of institutional investors showing increased interest in AI. Other companies, such as AustralianSuper, have also recently invested significant amounts in AI infrastructure.
The growing interest in AI can be attributed to positive forecasts about its future. According to Statista, the global AI market is expected to reach a valuation of nearly $2 trillion by 2030.
However, some investors have expressed skepticism about the current valuations of AI companies, comparing it to a bubble similar to the dot com era. Anthony Scaramucci, founder of SkyBridge Capital, and Bill Smead, CEO of Smead Capital Management, have both voiced concerns about the inflated valuations. In contrast, Goldman Sachs analyst Peter Oppenheimer believes that the current valuations are justified due to the companies’ strong balance sheets and returns on investment.
In conclusion, SoftBank’s investment in Mapbox is a testament to the growing interest in AI and its potential for the future. While some investors remain cautious about the current valuations, others argue that the strong financial position of AI companies justifies the high prices. It remains to be seen whether AI will fulfill its potential or if it will follow the path of the dot com bubble.