SoftBank, Korean conglomerates to join $130 million investment fund for AI startups

Korean conglomerates such as SK Networks, LG Electronics, Hanwha Financial and Japan’s SoftBank will join a $130 million fund to invest in AI startups by the end of the month, according to Nikkei Asia and local industry sources.

Taizo Son, the co-founder of venture capital firm The Edgeof [SCREEN CAPTURE]

Korean conglomerates such as SK Networks, LG Electronics, Hanwha Financial and Japan’s SoftBank will join a $130 million fund to invest in AI startups by the end of the month, according to Nikkei Asia and local industry sources.

The Korean companies, SoftBank and an unnamed Thai conglomerate recently signed a deal to join the Alpha Intelligence Fund, set up by SBVA, according to the Nikkei Asia report.

SK Networks was the first Korean company to confirm its participation following the report on Friday, investing $30 million in the fund. According to SK Networks, this is the second-largest investment from the participating members.

SBVA was established in 2000 as the early-stage venture capital arm of SoftBank Group. In 2023, it was acquired by The Edgeof, a global venture capital firm co-founded by Taizo Son, the younger brother of SoftBank Group CEO Masayoshi Son. The younger Son is also the founder of Mistletoe and chairman of GungHo.

The other two co-founders are SBVA CEO Lee Joon-pyo and Atsushi Taira, the managing director of Mistletoe Singapore.

The fund aims to be expanded to $200 million by the end of this year, with talks underway with other companies in East and Southeast Asia.

It will act as a platform that links investors with AI startups for investment or acquisition opportunities. Moreover, the companies involved can create special-purpose entities to make a larger investment in a particular startup.

The fund targets middle-stage startups with AI or other innovative technologies in seven sectors: cloud-powered software-as-a-service, healthcare, bio, fintech, semiconductors, robotics, and agriculture and fisheries.

Beneficiaries include startups in Asia and Silicon Valley startups that wish to expand into the Asian market.

The move is part of the global AI race as companies quickly adopt generative AI into their corporate systems for efficiency or use the hyped technology to expand their services.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]