SoftBank is betting big on AI in Latin America

The Japanese investment giant SoftBank is doubling down on artificial intelligence investments in Latin America, despite previous market turbulence in the region’s startup ecosystem.

Historical context: SoftBank dramatically transformed Latin America’s startup landscape by injecting $8 billion through two dedicated funds in 2019 and 2021, representing an unprecedented capital infusion for the region.

• The initial $5 billion Latin America Fund in 2019 matched the total venture investments made in the region over the previous two years
• A follow-up $3 billion fund was launched in 2021, further cementing SoftBank’s commitment to the region
• Many startups struggled to maintain their high valuations when global economic conditions deteriorated and interest rates rose

Current strategy: SoftBank is maintaining its regional presence while adopting a more measured investment approach, with a particular focus on artificial intelligence opportunities.

• The firm has partnered with Microsoft to invest in Blip, an AI conversational marketing platform
• Blip’s access to WhatsApp user data in Latin America, India, and Southeast Asia positions it as a potential global AI competitor
• SoftBank executives Alex Szapiro and Juan Franck remain optimistic about the region’s potential despite taking a more conservative investment stance

Market perception and reality: While Latin America is often viewed as trailing in AI adoption, SoftBank sees emerging use cases that challenge this perception.

• The region’s widespread WhatsApp usage provides unique opportunities for AI development and implementation
• SoftBank is actively exploring investments in compute data centers and other AI infrastructure
• The firm’s executives believe Latin America has untapped potential to compete with established AI leaders like the US and China

Strategic implications: WhatsApp’s dominance in Latin America could create unique advantages for regional AI development and deployment.

• The messaging platform’s widespread adoption provides valuable data and user engagement opportunities
• This ecosystem could enable Latin American companies to develop AI applications specifically tailored to local market needs
• The region’s large population and increasing digital adoption create significant scaling potential for AI solutions

Looking ahead: The convergence of SoftBank’s capital, established digital infrastructure through platforms like WhatsApp, and emerging AI capabilities could accelerate Latin America’s position in the global AI landscape, though challenges around technical talent and infrastructure development remain significant hurdles to overcome.