SoftBank eyeing buyout deals in India to push AI-led IT, BPO operations - The Economic Times
Published 5 hours ago• 5 minute read
SoftBank eyeing buyout deals in India to push AI-led IT, BPO operations
By & , ETtech
is exploring buyout opportunities in India, marking a significant shift from being a growth- and late-stage technology investor to that of a direct acquirer of assets, according to two people aware of its plans.The Masayoshi Son-led Japanese conglomerate held talks to acquire business process outsourcing (BPO) firm AGS Health in a potential $1 billion deal, but those did not materialise with global asset manager Blackstone taking the lead, they said. SoftBank has also been in discussions with other outsourcing firms like WNS Global, as it seeks to combine AI capabilities with services delivery at scale, either through acquisitions or strategic alliances, these people briefed on the matter said.
Since India doesn’t have large-scale AI foundational models like OpenAI or Anthropic, SoftBank is keen to accelerate the implementation of artificial intelligence across the outsourcing sector.
“SoftBank is meeting a number of IT services firms that are ripe for disruption due to AI. Be it financial services, healthcare or legal, they are evaluating a whole range of small-to-mid-sized firms. Being a technology investor, they feel they can bring in the resources needed to deploy AI,” said one of the people.
Queries sent to SoftBank did not elicit a response till press time Monday. In response to email queries, AGS Health’s current promoter, EQT Private Capital Asia (formerly Baring Private Equity Asia), said, "We are unable to comment on market speculation". A spokesperson for WNS said the company “does not respond to market speculation or rumours”.
Son’s SoftBank has emerged as a key ally of OpenAI chief executive Sam Altman, even as the Silicon Valley company is reportedly distancing itself from Microsoft, a significant shareholder.“The move is aimed at transforming traditional BPOs and KPOs into tech-enhanced service providers by introducing AI that can deliver cost efficiencies while also driving revenue growth for their clients, thereby creating meaningful value arbitrage,” one of the people cited above said.
ETtech
ET had reported earlier that the SoftBank Vision Fund, which has invested $160 billion globally across its two vehicles, was eyeing opportunities in AI infrastructure and data centres in India, amid the ongoing global rush towards AI buoyed by the launch of ChatGPT in late 2022.
Alex Clavel, CEO of SoftBank Investment Advisers, told ET in an interview last year that the group was exploring backing AI infrastructure and data centres in India. “AI in India could develop along these lines, building on the existing digital and tech infrastructure,” Clavel had said.
SoftBank’s interest in Indian IT-enabled services firms—such as BPOs and knowledge process outsourcing (KPO) firms—also aligns with its broader push to invest behind global AI infrastructure. ITeS broadly refers to services that leverage information technology to deliver business functions, including customer support, data processing, finance and accounting, and healthcare back-office work.
As part of this strategy, the company has launched The Stargate Project, a $500 billion initiative over four years aimed at building AI infrastructure in the US to support OpenAI.
In parallel, SoftBank is developing an advanced enterprise AI solution in collaboration with OpenAI, called Cristal Intelligence. Announced earlier this year in Tokyo by SoftBank founder Son, the Japanese investor is expected to spend $3 billion annually to integrate OpenAI’s technology across SoftBank’s portfolio companies.
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In a February announcement, SoftBank said Cristal Intelligence would enable AI agents to form “advanced systems that can learn and adapt to any enterprise’s needs”. Under the partnership, OpenAI will contribute research, technology and engineering expertise to the joint venture, SB OpenAI Japan, while SoftBank will provide sales teams and engineers to scale the deployment of these solutions.
In the US, Son has proposed setting up an AI and robotics manufacturing industrial zone in Arizona—on the lines of Shenzhen, China—at a cost of $1 trillion, according to a Bloomberg report. SoftBank has approached state governments and the Department of Commerce about the possibility of tax breaks for the project, codenamed 'Crystal Land'. If materialised, Project Crystal Land would reportedly include R&D labs and production facilities focused on artificial general intelligence (AGI), processing of advanced semiconductors, tech workforce housing and a potential integration with smart grid infrastructure.
SoftBank, which primarily invests in India through its Vision Fund vehicles, has backed several prominent startups, including the now publicly listed firms such as Swiggy, Eternal, Delhivery, Paytm, PB Fintech, FirstCry and Ola Electric.
After a few years of holding off from making any fresh investments, last year SoftBank started scouting for deals ranging from $30 million to $40 million. It was in discussions to back wearables startup Ultrahuman, but those talks fell through.
When asked about the possibility of SoftBank making smaller investments in the range of $20–30 million, Sumer Juneja, managing partner for India and EMEA (Europe, Middle East, and Africa) at SoftBank, had indicated in an interview with ET that the fund maintained a flexible approach. He noted that India remained a key market, and while SoftBank might begin with smaller investments in certain companies, it was prepared to increase its commitment as companies scaled and required more capital.
