×
Rakuten CEO justifies big losses as strategic bet on AI
Written by
Published on
Join our daily newsletter for breaking news, product launches and deals, research breakdowns, and other industry-leading AI coverage
Join Now

Rakuten’s founder and CEO Hiroshi Mikitani defends the company’s loss-making mobile division as a strategic investment in artificial intelligence development.

Strategic vision; Rakuten’s mobile telecommunications division, despite operating at a loss for four years, is positioned as a crucial component of the company’s long-term AI strategy.

  • The mobile division has accumulated more than 8 million users, providing valuable data for AI training and development
  • Losses from the mobile division have impacted Rakuten’s profitable e-commerce and financial services operations
  • Mikitani’s defense comes in response to critics who question the wisdom of entering Japan’s highly competitive wireless market

Market context; Japan’s telecommunications sector presents significant challenges for new entrants, even for established companies like Rakuten.

  • Rakuten entered a mature market dominated by established carriers
  • The company has had to invest heavily in infrastructure and customer acquisition
  • Competition in Japan’s wireless market has led to pricing pressure and narrow margins

Business integration; Rakuten’s strategy appears focused on leveraging synergies between its diverse business units.

  • The mobile division provides data that can enhance Rakuten’s e-commerce and financial services operations
  • AI development using mobile user data could create competitive advantages across the company’s ecosystem
  • The strategy aligns with broader industry trends of using telecommunications data for AI advancement

Looking ahead; While the mobile division’s losses have raised concerns among investors, Rakuten’s bet on AI-driven growth represents a long-term strategic gamble that could reshape the company’s future trajectory.

Rakuten Billionaire Justifies Mobile Arm Losses with Big AI Bet

Recent News

AI’s energy demands set to triple, but economic gains expected to surpass costs

Economic gains from AI will reach 0.5% of global GDP annually through 2030, outweighing environmental costs despite data centers potentially consuming as much electricity as India.

AI-generated dolls spark backlash from traditional art community

Human artists rally against viral AI doll portrait trend that threatens custom figure makers and raises questions about artistic authenticity.

The impact of LLMs on problem-solving in software engineering

Developing deep expertise in a specific domain remains more valuable than general AI skills as technology continues to reshape technical professions.