To be fair, there is something more in the picture. UAE for instance is much more cosmopolitan, but has failed to be a research hub, in contrast to rich city states like Singapore. Iran, their neighbour, produces some very smart people however - who then inevitably move out, considering the flavour regime in that country.

You’re wary of moving to a desert special economic zone if you are unsure or suspicious of it

You’re weary of it if you have moved to many such zones already and you are a bit sick of it

Are these city states research hubs? Hong Kong or Liechtenstein perhaps.

By one order of magnitude these days, the Norwegian fund's market value was less than $100b in 2004 though.

Someone whose core business is losing money is trying to recoup them in an area that they have no clue about.

This is a typical guy who feels pressure so he buys at the top and puts his money based on recommendation of others in a business that is going to be next big thing. A typical sucker in other words who will end up penniless.

Poor Saudis.

They should invest in nanotechnology, and make the world’s smallest violin.

What, oil? Go look up the average barrel cost for Saudi oil (hint: it's less than 2 lattes). Demand needs to drop to essentially zero before renewables are competitive with their oil. They are not losing money.

Well that is how the current VC market works - sadly

Yeah but it's not like the variables at work before are the same at work today. With the current set of variables, even LESS likely than ever than what you call the "current civilization" would collapse completely, because it's massively decentralized in terms of knowledge.

Not precisely an extinction, but still not a lot of hope.

It's like painting a wall mural using fine tipped brushes, rather than wide paint rollers or a paint gun. You get the job done so much faster, but your quality will suffer tremendously.

Investing into Uber at $47B isn't vision.

Bezos isn't a VC, he owns the greatest demand engine the world has ever known, and that matters when spending money.

And Gates ? he deals, smartly, with much lower sums. His energy VC is for example, has $1B.

It's not so easy spending $40B-$50B in 3 years, like the vision fund did.

It is if you buy a few healthy companies instead of gambling in the early stage startup market.

Come to think of it, it has many similarities to Google X. But that's extremely hard to build.

Such an organization has to be grown slowly. But that takes too much time if you have the opportunity to manage huge amounts of money right away.

"lets do Google X but with $100 billion" is a laughable business model

Dunno. I'm not quite sure of the figures but in 2015 they put in $3.5bn for the year. Against that Waymo which came out of X was recently valued at $105bn (https://www.cnbc.com/2019/09/27/waymo-valuation-cut-40percen...)

That aside, when you have $100B investing it is actually quite challenging. Take Stripe, for example, a fantastic private company that is valued at over $33B, but it has raised drastically less money than Uber or WeWork.

In order to deploy $100B it isn't enough to make $300MM bets because it would require 333 such investments. Just imagine. You would need 330 companies the size of Stripe and lead a late stage growth round to deploy that amount of capital.

Now Stripe has raised less money because they are more capital efficient and aren't burning cash like Uber or WeWork.

With Uber, at least there was a game plan because it was a tech company. Now it isn't important to debate how much of a "tech" company Uber is, simply think of tech as leverage. Which is the basic idea of tech companies, meaning that you write code once and then you can infinitely replicate at a near zero cost. While building something physical, your cost doesn't decrease towards this zero amount.

People also thought that DST was crazy when they invested at Facebook at a $10B valuation, but that has worked out well for them.

So regardless, Uber was a good investment and worth the risk, and still we have to wait and see where Uber is trading in 2-3 years time.

The real problem for the Vision fund is that to deploy this capital they necessarily need money losing businesses. These companies need funds to grow, so it allows them to absorb more capital which makes deploying $100B a lot easier.

Now Uber has leverage because of it's network. If you open your iPhone and you don't have an Uber waiting for you then you will stop using it. So actually there is real value in the network there.

For WeWork there is no "tech" and there is no leverage. Certainly the tech side is obvious, just look at the employee head count and the leverage side is also non-existent. There being more than 10 WeWorks in the same city for me doesn't actually make my experience of WeWork any better or worse. Which has been proven by how many coworking startups have sprung up to compete with them and are having no issues filling their office space.

So here you have a large money losing business with no leverage and as a result giving it a tech multiple was blindingly obvious to many people that it was a bad idea.

With that the Vision fund is running into real hot water. They need large growing companies in order to deploy their investment capital, but investing in money losing businesses is a risky, especially when the largest money losing businesses don't have real leverage and aren't real tech companies.

This just all unraveled a bit quicker than Softbank would have liked, but it isn't at all surprising.

To see other investments of theirs falter isn't surprising either. Because they will all follow the money losing model in order to absorb the capital, but unless they truly offer leverage then they will be either displaced, or they won't provide enough value to eventually out run their costs.

What you are describing is more like a pre-seed/seed fund of which there are thousands around including YC. Sure they don't have the capital but that is often not the blocker for most of these companies.

Vision fund is focused on taking successful companies global. And using their capital to knock out competitors and their experience in managing execution risk.

And their "vision" seems to be focused on a world where everything is provided by autonomous and robotic systems. And where Uber, Wag etc are the brands that leverage them.

This strategy will backfire in a fragmented market. I.e. if the competitor hold on.

But their returns from Uber, WeWork, and Wag kind of support my point, whereas ARM and Nvidia support yours/theirs.

My broader point is that most informed technologists would've said three years ago that the ARM and Nvidia investments made more long-term sense than Uber and WeWork, yet Uber and WeWork are a disproportionate amount of the portfolio.

So if the Vision Fund isn't even going to succeed at the "scale big companies globally" approach, I'm not sure they would've done much worse going with the approach I suggested (or doing more deals like ARM and Nvidia, maybe they could've taken a huge activist stake in IBM or other large existing tech cos).

The thesis for Uber (and wework) was simpler - assuming they had sound unit economics, give them $XB to repeat all over the world. In fact if Uber didn’t mistakenly give Lyft a second life, Uber might be in a much better spot.

I think the problem is, companies like Uber, Wework and Wag work really well in wealthy cities like SF and NYC, but not as well in other cities. I live in SF and WeWork “works” there are glut of companies coming in and out of the VC machine that need temporary space that end up needing to also scale up quickly. However that’s unique to SF and SF is such a large market, maybe it looks sound until it doesn’t.

So you should not analyse SoftBank investments in terms of logic but more in terms of underlying self-destructive behavior.

The size was originally used as a brute-force growth tactic and competition clearer, but now it's clear that it's just leading to unviable business models and vastly inflated valuations while hurting more promising companies that have to compete in this bubble environment.

The largest couple hedge funds are in the broad neighborhood of that size, so perhaps not too oversized.

We've only invested $1Bn in fusion (according to this article: https://www.greenbiz.com/article/fission-fusion-capital-flow...). Physicists have been saying "we're close" for like 70 years.

It took the Manhattan project the equivalent of $23Bn. If we had the same type of investment, we could have clean and (almost) free energy forever. Instead we spend like 20% of GDP on energy per year. And destroy our only planet...

It's not like the stakes are high or anything.

I think it's telling that the most optimistic scenario they can come up with is "someday it might be competitive with fossil fuels if you consider the cost of fuel only".

The thing is, if fission is uncompetitive in the long run because of capital costs, can you, with a straight face, claim that fusion will be better, even in 50 years?

Edit: Of course, making fossil fuel more expensive would change the calculus. But my point is, since that is a prerequisite to addressing climate change anyway, we shouldn't be talking about fusion as a particular alternative.

That is, until something can be put into production, it is not a superior product.

This is patently untrue. ITER, the source cited in that article [0], gives a cost so far of $15 billion and rising just for one facility.

What the article actually says is that $1 billion has been invested by venture capital firms in fusion since 2002. Most of the investment, like in the Manhattan Project, comes instead from government sources.

[0] http://www.iter.org/faq#Do_we_really_know_how_much_ITER_will...

It's not construction work, you can't just hire more people to speed up research. When you have the top 50 or so scientists in the field, you just need to wait for results.

Agreed on your research point within the context of one approach in one company.

It's the equivalent of the software developers' "I'm 90% done, I just have to.."

It is hard to show "traction" and "exponential growth" with this kind of things.

If you are $10M investment in a fund of $100B you won't be getting much support or mind share from your investor. It's not just VCs shopping for companies to invest in. It's also companies thinking from whom to take the money.

::eyeroll::

It's an investment. Their top priority likely isn't eliminating diseases. Nor do most investors think it's wise to compete against Google.

I am also not the only one with this thought; Professor Andrew Lo of MIT has a final chapter in his book "Adaptive Markets" about how he might structure a similar "big problem solving fund" akin to the Vision Fund but with arguably bolder ambitions.

https://www.amazon.com/Adaptive-Markets-Financial-Evolution-...

https://publicpolicy.wharton.upenn.edu/live/news/2784-can-fi...

And before someone argues that "they're likelier to lose a lot of money trying riskier investments", they just seemingly lost a lot of money on the "easier" investments. So if you're going to lose money, I'd rather it be on trying to solve hard problems than paying Adam Neumann.

I appreciate your informative comments to HN, but we need you to stop posting like this. It damages the community, which is fragile. Would you please review https://news.ycombinator.com/newsguidelines.html and fix this going forward?

While I have massive respect for the people with the insight, patience, and understanding to tackle biotech, I can't imagine spending 8-10 years for the hope that maybe you've done something useful.. and then figure out if you can sell it.

Examples?