Softbank Takes 'Wait And See' Tack Over China Investment Risks

SoftBank Group Corp. Chairman and CEO Masayoshi Son said Tuesday that active investments by its funds in promising tech startups in China will have to wait amid uncertainty over Beijing's crackdown on the IT sector, Mainichi Japan reported.

Photo Insert: SoftBank Group Corp. Chairman and CEO Masayoshi Son

Son expressed confidence in the potential of China as a major driver of innovations related to artificial intelligence, an area SoftBank has focused on, but the top executive said his company will "wait and see" until the extent of the move by Chinese authorities become clearer.

The Chinese government is seeking to tighten its grip on the tech industry in an apparent bid to maintain social stability, targeting IT giants like Alibaba Group Holding Ltd. and Tencent Holdings Ltd. SoftBank has a stake in Alibaba.

"We have to see how far regulations will go and at present, we don't know which area is of small risk. So we will be cautious and resume investments when such factors become clear," Son told a press briefing on SoftBank's first-quarter earnings.

Son acknowledged that Chinese shares face a "severe situation." But he added, "We still have high expectations (for China)."

SoftBank has been stepping up investments in startups with growth potential through its Vision Fund, morphing into more of an investment company from a telecom giant.

SoftBank has invested in 301 startups via Vision Fund 1, 2 and another one targeting Latin America. Some 34 percent of the investment portfolio was allocated to the United States in terms of market value, ahead of 25 percent in Asia and 23 percent in China at the end of July.

WEEKLY FEATURE : PAL READY TO SOAR WITH PANDEMIC