God of Corporate Hunting - Chapter 272



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◈ Episode 272 Artificial Intelligence (2)

Most IT companies in the United States are headquartered in Silicon Valley.

But Seattle is also home to two huge Big Tech companies.

Seattle has changed dramatically since these two companies moved their headquarters there.

Since AMZ took over, Seattle’s population has grown by more than 20 percent, and its median income has skyrocketed. It is now one of the wealthiest cities in the United States, a clear example of how cities naturally follow suit as companies grow.

AMZ’s headquarters consisted of five buildings, including a 37-story office tower. The three glass biodomes in the center were a botanical garden with a unique appearance.

A retreat designed to provide fresh inspiration to employees.

Nam Yun-myeong easily reached his destination with the guidance of AMZ staff.

I met the other person in a comfortable atmosphere, as if I was in a cafe.

There are five opponents in total. The highest ranking person is Eric Burzynski, CEO of AMZWS (Web Services). He is one of the five most powerful people in AMZ.

Unfortunately, the expectation that we might meet the CEO of AMZ, a big name in the big tech world, was completely dashed. It means that the name value of the Korea Asset Management Consortium is still not enough to meet such a big name. However, Burzynski is not that bad of a person.

Burzynski is a CEO in his mid-50s who grew AMZWS into the world’s largest company in the cloud market. He is also a brilliant Harvard graduate with a degree in public administration.

“Thank you for coming.”

After the greetings, they went straight into the main topic.

“As you know, AMZWS provides cloud services to more than 1,000 corporate customers around the world. These days, AI-based corporate management is creating a sensation. We are also working with the Korea Future Research Institute to further strengthen this service.”

Although he used various words and technical terms, the conclusion was that he wanted to work with the Korea Future Research Institute.

There is no reason to hesitate in collaborating with large companies like AMZ to further grow the company. So of course I agree. But… … .

“How did you find out about the Korea Future Research Institute?”

“Because it has recently been prominent in AI-related papers and various achievements.”

The main products of the Korea Future Research Institute are only the ship autonomous navigation system and the VF-3 automatic navigation system, but since these two items are receiving so much attention, their existence has naturally become known.

In fact, if you look at the staff of the Korea Future Research Institute, their presence is quite strong. However, the core member, Heo Eun-gyu, is still unknown in this field.

“A paper you recently presented at an academic conference?”

Nam Woon-myung hit the nail on the head.

“Haha, that’s right. As you know, AI makes errors at unexpected points. Customers are confused by such AI judgments. We expect that using the technology developed by the Korea Future Research Institute, we can reduce those errors by half.”

“It will be reduced by 90%, not half. It is the only way to avoid malfunctions at the moment.”

“Yes. But it would be too expensive to get the hang of general AI. That’s why we want the new technology from the Korea Future Research Institute.”

After several conversations, I was able to confirm what they were aiming for.

Burzynski, who had been paused for a moment, suggested.

“We estimate the corporate value of the Korea Future Research Institute at $1 billion. Based on this value, we hope that the two sides will strengthen their cooperation through a stock exchange.

For reference, AMZ’s current market cap is a whopping $1 trillion.

Although the Korea Future Research Institute is a new company that has not been established for long and has not yet achieved any notable results, $1 billion is a completely wholesale price.

Nam Yun-myeong asked with a meaningful expression.

“Do you really think it’s a billion dollars?”

“Hmm, if you want, I can raise it a little.”

Even so, nothing will change.

The value of the Daehan Mirae Research Institute analyzed by Nam Woon-myung is 10 billion dollars based on current sales alone. The value of an IT company with major technology cannot be estimated based on sales or net profit alone. If future growth potential is taken into account, it will be much higher.

Burzynski’s expression was relaxed.

In fact, the Future Research Institute is like a hole-in-the-wall store to him.

Burzynski, sensing the discomfort in Nam Woon-myeong and his party, tried to persuade them again.

“Isn’t AI development and training expensive? Big data and cloud usage are also essential. It will be difficult for the Korea Future Research Institute to fully cover the AI ​​training costs. We can solve this problem. That’s why this proposal is very advantageous to the Korea Future Research Institute.”

That’s not wrong. AI development is a money-eating hippopotamus. Although costs are being reduced by using some of Stanford University’s facilities through Austin, there are limits to that.

That’s why I was interested in Burzynski’s suggestion.

Seo Jun-kyung and Austin, who knew the difficulty the best, nodded their heads slightly. They judged that the cost that the Korea Future Research Institute is currently paying is enormous, so even a deal that offsets this would be profitable.

Of course, this is a calculation method only for developers that investors Nam Woon-myung and Yoon Se-bin do not sympathize with at all.

“Do you think AMZ’s assets are worth it?”

“Of course. Even if the Korea Future Research Institute links with other cloud companies, it will not be able to reduce the cost further.”

AMZ’s confidence was evident.

In this situation, even if you try to increase the value by pushing a couple more pennies, it’s still just pennies anyway. It’s better not to receive any investment at all.

If necessary, we can raise funds from CSK.

What makes an alliance with AMZ so desirable is not the money, but their cloud and existing AI development base.

Burzynski overlooked that fact.

Of course, Nam Yun-myeong knows why they misjudged.

The consortium of Korea Future Research Institute’s major shareholder, Korea Asset Management, is a private equity fund, so it is difficult to continue investing, like pouring water into a bottomless pit. They must have also expected that if they valued it appropriately, they would recover their investment and get out.

But their relationship is not simply that of an investor and a company. The major shareholders of the Daehan Mirae Research Institute are in fact individuals Nam Woon-myung, Yoon Se-bin, and Bae Joo-hyun. It is like a private company that does not need to recover the investment.

That’s why.

“If that’s the value of the Daehan Mirae Research Institute that AMZ judges, then I refuse. How can we possibly collaborate with such a small company?”

“What do you mean? We will fully support the AI ​​development of the Korea Future Research Institute.”

“That’s right. However, it seems that there is no evaluation of our human and technical resources.”

“yes?”

“We would rather be valued in the open market.”

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Burzynski did not understand Nam Unmyeong’s words.

The public market valuation is the stock market, and only publicly traded companies that have made their companies public can do so. The Korea Future Research Institute is unlisted and does not even have any shares traded on the over-the-counter market.

Nam Woon-myung said after doing some simple work on his cell phone.

“I just sent you an email. It’s a brief summary of our conversation today. AMZ estimates the value of the Daehan Mirae Research Institute at $1 billion. This email is to confirm whether that’s a good enough price.”

Burzynski checked his email.

“You’re here. But why did you send this?”

“Please take a look. I sent the same email to other companies. I’m talking about OAAI and GG, two companies that are currently emerging in AI development. I want to see if they think the same.”

“What is this!”

Burzynski opened his mouth in confusion and barely managed to control his expression.

Burzynski’s face showed his displeasure. He meant that he was asking why the contents of the meeting here were being made public.

“We also want to confirm publicly. Are you guys beating up the value? By the way, we are not short on funds either. Korea Asset Management has global LPs including several sovereign wealth funds. We can also use CSK’s funds.”

“Well, still…….”

“This is the valuation we think the public market will give you. If other companies value it the same way, we’ll accept your offer.”

Burzynski fidgeted at Namwoonmyeong’s calm explanation.

Of course, if the value is still low, you can just break the board.

They don’t have a shortage of money anyway.

* * *

After the meeting, Nam Woon-myeong and his party had a meal at the AMZ restaurant.

As a complex building with tens of thousands of employees, there was nothing that was not there.

The menu they chose was sushi.

Yoon Se-bin expressed his thoughts while using chopsticks.

“I didn’t know that OAAI and GG would appear there.”

“If you’re going to do it, you can get a fair price by making them compete.”

“AMZ overestimated their cloud.”

“Yes. We started from the assumption that we had to hang ourselves on them if we wanted to continue developing AI, so we couldn’t start the negotiations on equal footing.”

Nam Yun-myeong explained their misjudgment.

If AI leaders OAI and GG get involved, AMZ’s advantage in cloud services will disappear, because OAI and GG can provide the same.

Now, the question is how much they value the new technology that only the Korea Future Research Institute possesses.

A technique to avoid unexpected errors that occur in professional AI. Probably even OAAI and GG are drooling over this.

That company’s financial strength is no less than AMZ’s, so it will probably be a good match.

“Did you see Burzynski’s bewildered expression at the end?”

Yoon Se-bin asked everyone.

“Haha! That was refreshing.”

Austin also laughed happily.

“Is it tomorrow? A fun date?”

“Yes, that’s right. If you give them enough time, they can conspire among themselves.”

Nam Yunming and I agreed to meet again at the same time tomorrow after finishing the meeting today. Of course, Burzynski was embarrassed and wanted to continue the meeting right away, but Nam Yunming unilaterally informed us.

In any case, meetings are a battle of momentum. When objective data is lacking, momentum becomes even more important.

Wasn’t it AMZ that requested investment from the Korea Future Research Institute in the first place?

If you don’t like it, just decline.

It was when they finished eating.

Seo Jun-kyung’s cell phone rang.

Seo Jun-kyung, who checked the caller, spoke quietly.

“I got a call from OAI.”

Seo Jun-kyung said that he was a former employee of OAI and they still keep in touch occasionally.

Seo Jun-kyung, who asked for understanding with his eyes, answered the phone.

“……Yes, that’s right. Oh, the content of the email is true. The current proposal from AMZ to invest in the Daehan Mirae Research Institute is…….”

It was also an inquiry about the email sent by Nam Woon-myung.

They quietly listened to Seo Jun-kyung’s phone call.

Seo Jun-kyung, who had been explaining the situation diligently, repeated again.

“OAI estimates the value of the Korea Future Research Institute at $10 billion. What should we do?”

Its value instantly increased tenfold compared to AMZ.

It stretched like a rubber band in an instant. The value of tech companies, especially those that prioritize technology over sales, is unknown to anyone.

Austin looked satisfied, but Nam Woon-myung was not. He was still far from the value he thought he had.

Yoon Se-bin’s opinion was no different.

Nam Woon-myung answered Seo Jun-kyung with a smile.

“If you are willing to negotiate, please tell AMZ to come to the meeting tomorrow. Tell them that we haven’t decided anything yet.”

Seo Jun-kyung relayed it to Oea.

After hanging up the phone, Seo Jun-kyung raised his thumb.

“It was a stroke of genius to induce competition with other companies.”

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