World Domination through Planet Development - Chapter 16
Only Noblemtl
Episode 16. Nanosoft Attracts $10 Billion in Investment
Sarah AI’s success has sparked controversy.
Various media outlets have reported on the social impact of AI, and the pros and cons have been clearly divided.
Of course, this was expected to some extent, so the enterprise pricing policy prevented companies from reducing their workforce and replacing them with AI, and even if they tried to use it in a fraudulent way, it could have been sufficiently blocked because Sarah could have already identified such cases.
Another aftermath is that more people are coming to the company.
I also had the opportunity to see the president of Cocoa Asset Development, whom I had never seen before.
I went to congratulate them, but all I got was a formal greeting like thanking them for letting me move into their building.
In addition, various reactions came out from various companies overseas, and among them, there was one company that reacted most sensitively.
That’s right, Nanosoft.
Nanosoft, which is devoted to the AI industry, was shocked after the Sarah AI Expo demonstration.
How should we take this?
The first two days after the announcement were spent immersed in reviewing the performance of Sara AI.
That also ended with a great impression on the first day, and for them, that time was such a waste.
And they find out its true value on the second day and go into an indefinite meeting.
It means that we will never rest unless a decision is made by the deadline.
“Okay, let me start with my impressions.”
Nanosoft’s CTO opened the discussion.
“To be honest, I doubt it’s a scam.”
“I don’t think it’s a scam. I think it’s not, but is it technically possible? I don’t think so.”
There is no evidence to confirm it as fraud.
But for their pride in being called the top in this industry, this Sarah AI was something they could not understand.
“There is no session. This means that it could be a real-time modeling AI, but it would require enormous computing power. And it could also recognize images and do almost everything, right? In simple calculations, it would require about 10,000 times the performance of the 4.0 model of Close AI that we have invested in. At least, at least. This should be considered something different from the AI that we knew before.”
The CTO frowned.
“We conducted a private test of about 1,000 Sarah AIs yesterday. The probability of it being technically a scam is less than 1%.”
Another employee who had been silently listening to the CTO’s uncomfortable remarks opened his mouth.
“I find it a bit funny. Even if we here are suspicious, nothing will change. That closed beta test was a waste of time and money, unfortunately. Even just around me, there are quite a few people using Sarah AI. At least, we should estimate that there are already hundreds of thousands of users. It’s long past the point where it’s not a scam. It’s just a waste of time to deny reality because we don’t understand it. Even at this moment, PDC’s corporate value will skyrocket.”
Only then did the CTO nod.
“That’s right. There needs to be a complete overhaul of the AI business strategy. And at the center of it all, there will definitely be Sarah AI. To be exact, it will be at the center of the global AI industry.”
The conference room was silenced by the CTO’s bold remarks.
“So, from now on, the key issue is how much equity we can bring in. There is no assumption that the investment attraction will fail. We will bring in unconditionally. How much can we bring in? That’s all we think about.”
The result decided by the meeting.
It was an unconditional investment attraction.
We were able to dramatically schedule an investment consultation meeting with PDC, which was 7 days after the demonstration announcement.
They predicted that by the 7th day, the company would be valued at $10 billion.
The prediction came three days after the demonstration.
It was estimated that there would be at least 1 million users, and since AI’s performance was better than anyone else’s, no one thought the prediction was outrageous.
It is probably unprecedented for a startup to grow this quickly.
Of course, considering the time it took for Sarah AI to be developed, we cannot simply say that it grew in a short period of time.
There must have been a lot of trial and error and development time.
The goal is to fully withdraw the existing AI business unit, recover the investment, and then raise $20 billion through that amount and other additional capital procurement.
Due to the nature of Nanosoft’s investment policy, it does not particularly interfere with management and aims solely for technological business linkage and profit.
The investment strategy was set to target a stake of up to 49%.
We reviewed the business benefits that Nanosoft’s investment attraction and business agreement will bring and discussed support measures.
Departure date.
They were fully prepared and had nothing to fear.
I was full of confidence that we would be able to secure the contract with the best performance.
Not knowing that everything had already been revealed to the other person… .
* * *
Upon arrival at Incheon International Airport, they were greeted by Korean branch staff.
A staff member who spoke English fluently walked over and greeted me.
“Nice to meet you.”
“Hello. This is Yongcheol Han.”
“Okay, Mr. Han. Let’s go.”
“Yes, this way.”
After leaving their luggage, the group first visited the Korean branch office of Nanosoft.
The branch staff were fully prepared upon hearing the news that the headquarters staff had come out.
Here, your self-esteem is further enhanced.
We are an elite group that leads global companies of this level.
The contract that will be signed tomorrow will be key to the next AI business.
And it can be a stepping stone to success, not a hindrance.
We will make it happen.
On the day of the contract.
Their first mistake.
The problem is that they failed to catch that this contract had negative elements from the start.
They brought an interpreter with them, but there was no need for him anymore.
Sarah AI’s interpretation ability is perfect.
It was a very basic mistake.
The fact that I prepared as I always did, even though I already knew it well.
I was so focused on the core parts that I ended up making mistakes in the basics.
In fact, even though I knew it, there was no way to deal with it.
Even if you didn’t bring an interpreter, it would mean acknowledging Sarah AI’s technology and entering, so it was an element that you had no choice but to enter one way or another.
An alternative was needed that would allow us to endure it rather than avoid it.
But unfortunately, they didn’t know that fact.
“It’s nice to meet you. I’m Chris Hogan.”
They came to PDC and finally encountered Jungwoo.
“Hello. My name is Jeongwoo Cheon.”
Jungwoo’s voice was translated into English and transmitted directly to the speaker.
Chris Hogan, the group’s representative, was shocked by the situation, but like a professional, he kept his mouth shut.
“Sarah AI. It’s amazing. It’s already being applied in real life.”
“Thank you. Since you came here to buy this, shouldn’t you charge me for it? Haha.”
The party walked through the PDC’s offices and into a conference room.
I didn’t see many employees as I entered the conference room.
It was not clear whether there were originally no people there or if there were external business trips.
“Wow, that’s amazing. An AI developed by such a small company.”
Chris Hogan said with genuine admiration.
“Because it’s an era where innovation comes from garages.”
“Haha. That’s right.”
Chris laughed at Jungwoo’s surprising words.
Soon the two entered into full-scale negotiations.
Chris and his group first looked over the report written by the PDC.
This is an internal document regarding financial statements, credit ratings, etc.
Of course, there was no room for criticism.
There were no loans like others, and rather it was established with pure capital.
Anyway, this wasn’t a company for which such data would have a negative effect.
“As you can see, it’s a very good investment opportunity. Plus, this month’s results haven’t been posted yet.”
“Honestly, we don’t really care about the corporate evaluation of startups. Our principle is not to interfere with management in the first place, and our goal is purely technical cooperation.”
Chris slyly mentioned the benefits of their investment.
“That sounds pretty good. But I guess you want a lot of stake.”
“Well, we would like to take up to 49% stake.”
Although the amount has not been mentioned yet, it is certainly an amount that is acceptable for a startup compared to the amount Nanosoft has prepared.
“49%… That’s too much.”
But Jungwoo didn’t take the bait easily.
“I would appreciate it if you would consider our investment as that large.”
Chris Hogan answered with a laugh.
“Really? I’m looking forward to that.”
“Huh. We… .”
“Oh, wait a minute!”
Just as Chris was about to speak with a smile of conversion, Jungwoo interrupted.
“… … ?”
“Let me guess.”
This is their second mistake.
That they didn’t know that the entire contents of their meeting had already been leaked.
Of course, you can’t call it a mistake, but in any case, it could be seen as a defeat for them.
As Chris Hogan was having trouble understanding what Jungwoo was saying, Sarah’s voice came out through the speaker.
[Currently, Nanosoft maintains internal reserves at approximately 200% of quarterly sales in accordance with its financial stability policy, which amounts to approximately $100 billion. Excluding non-cash assets, considering Nanosoft’s current low investment return and our PDC’s corporate value, the available investment is expected to be approximately $10 billion, or 10%. If we go as far as withdrawing our existing AI business investment, we believe that an additional $10 billion in cash infusion will be possible, securing a total investment of $20 billion. You said you want a maximum of 49% of the stake, but considering Nanosoft’s share and influence in the AI industry, we believe that the maximum amount you can give up for our PDC stake is approximately 17%. Therefore, we propose that you sell your 17% stake for $10 billion. In order to achieve fair pricing, we at PDC will give you priority in selling your stake in the future and promise that there will be no other investment agreements. [Since you said that you are focusing on a technology agreement, I think that Nanosoft will be fully satisfied with the conditions.]
Chris’s mind became dizzy at Sarah AI’s subsequent words.
First of all, it’s half right and half wrong.
It is true that the company’s internal reserves are $100 billion.
However, there was a situation where they had previously purchased a significant number of financial products from Citigroup in an undisclosed investment deal and suffered a large loss, leaving them with cash of about $15 billion tied up.
Now, they’ve sold some of it and saved the proceeds elsewhere to put back $100 billion.
So, if you look closely, it is true that the available funds were actually around 5 billion dollars.
The money that was somehow raised through disposal was also raised in a hurry for this investment contract, but it is not a situation where I can say it out loud.
Anyway, the bottom line is that there is $20 billion in available investment capital, so there is nothing to say.
There was a workaround that brought in at least 17% of the money at the time of the meeting, in the amount of more than $10 billion.
This 17% was the minimum percentage calculated to ensure that Nanosoft would not be excluded as a major shareholder in the future AI industry.
Bringing in an unconditional 17% stake worth more than $10 billion.
It sounds strange at first glance.
Wouldn’t it be better to get the stake at a cheaper price? Why does it have to be over $10 billion?
Corporate investment has two aspects.
Investments made purely for profit. Investments made for business purposes or long-term investment purposes.
Since this investment is obviously the latter, the investment strategy is bound to be different.
If you don’t have enough equity to bring in, then you have to increase the value.
Of course, bringing it up to over $10 billion isn’t a very good option. The best would be exactly $10 billion.
To summarize simply, that’s how it is, but the calculation process is by no means simple.
This 17% figure is based on internal confidential information, including the current investment capacity of the world’s top 100 investment companies and their willingness to invest in AI, which are all unknown to the outside world.
This is not a number that can be simply said by AI researching the Internet.
Chris clearly thought that someone must have left the Sarah AI on in a constant chat mode during the meeting.
It may not have been intentional, but a mistake is a mistake.
However, one thing to note is that, according to the rules, smartphones are not allowed in the conference room.
Except for the meeting organizer… .
The meeting host is ultimately the person with the most power in that meeting.
The point was that he was someone you couldn’t go and confront later.
ha….
Chris sighed inwardly and answered with a relaxed expression on his face.
“That’s really great. I’d say you’re pretty close. Haha.”
“Oh, really? I was a little worried that it might have gone a bit off track, but luckily it did. Hahaha.”
Don’t laugh! You industrial spy!
Chris was already convinced that the meeting contents had been leaked.
The possibilities of this AI are truly terrifying.
But doubt is just doubt.
He kept a professional smile on his face.
“But it may be difficult for us to accept that offer right now. I think we need to discuss it further.”
And the third mistake.
I didn’t know that there was nothing to regret in the PDC.
What this means is that the relationship between A and B cannot be hidden.
“Is that so? That’s too bad. Then do whatever you want. Just keep in mind that we made about $10 million in sales this week. It’s not written there, though. So next week, the price will probably go up. The waiting list is already so long that I can’t say for sure if Nanosoft will be next.”
Of course, it’s a lie to say that there’s a long wait here, but in a fight, momentum is important.
Chris’s complexion darkened.
“Now that I think about it, it sounds pretty reasonable. I was mistaken for a moment. First of all, did you say the right to sell? I think it wouldn’t be a bad idea to focus on that in negotiations.”
In the end, Chris had no choice but to admit defeat and beg for even a little bit of food.