“The sad thing about artificial intelligence is that it lacks artifice and therefore intelligence.” — Jean Baudrillard

SoftBank Group is a company that invests in other companies, particularly in technology. They are based in Japan.

The thing to note about SoftBank is their major investment in a chatbot “AI” software maker. They have invested billions of U.S. dollars in this area, expecting to make some kind of nebulous return on their investment. The question is, where is this return money going to come from? Since the dawn of the internet era, there have been booms and busts in the IT sector. If you were smart and invested in Facebook or Amazon, you could make money, sure. But those were needle-in-the-haystack investments. They were the bare bones minority among a vast sea of also-rans, and required specialized knowledge — or sheer luck — to do well with.

Back to SoftBank. Masayoshi Son, the founder of the company in the 1980s, started out selling magazines for Japanese computer hardware companies. Over the succeeding decades, the company would branch out dramatically. It is helped that it has money from oil-rich Middle Eastern countries (countries that are worthless without their “black gold”).

SoftBank does have some good investments. Arm, a chip manufacturer, and Alibaba, a Chinese internet giant, are both profitable. SoftBank did very well with Alibaba, turning a $20 million investment into $60 billion more than a decade later.

The company has a $100 billion Vision Fund which it uses to make new investments in the tech area primarily. Saudi Arabia is the biggest investor, which doesn’t inspire confidence. But there are other notable men and companies in the deal, including Apple corporation, Sharp, Foxconn, and Larry Ellison. Perhaps the most respect-worthy name in the list is Ellison, who took Oracle to new heights under his stewardship and became a multibillionaire. Ellison was also the one who followed a Mongol conqueror’s quote about it is not enough that I win, everyone else must lose dramatically.

But is OpenAI going to make money? That’s the billion-dollar question. So far, “AI” manufacturers have gone for the easy solutions by mapping gigantic databases into tightly written software coding packages. They are gigantic photocopying machines of information. They access so much data that they can “appear” to think, but they do not. The assumption being that as they ramp up with larger and larger data sets, new intelligence will begin to emerge, which can be tamed and harnessed.

The chatbot programs are the loss leaders of this “industry.” So far “AI” is all tagline, no money. SoftBank is betting billions of Saudi Arabian petrodollars that it can turn this into something big. It is shooting for the moon, and it admits it.

I studied computer science at university, and it seems to me that true Artificial Intelligence is going to require the creation of a synthetic brain — not just using Nvidia chips to access massive crops of words and symbols. The creation of a synthetic brain is hard. So far the “AI” wonder-workers are picking at low-hanging fruit. The higher up they go, the more likely they are to fall — and fall hard.

The basic problem is that there is too much money circulating around in global financial markets, with no place to park it. Stock markets are at record highs. Why? Because the business fundamentals are so good? No. It is because everybody and his father’s pension fund is piling into the stocks selling biz. Same with real estate. Too much money, not enough plums to pick. The valuations of everything get jacked up. This is forcing a channeling of money into chatbot companies, as vast sums of money are begging for a chance at making more money elsewhere. The greed is neverending, and SoftBank has latched itself onto a jumping Asian tiger.