With the growing importance of AI applications, no one can get past tech sizes like Nvidia. This wants to change a Ki-inhorn from Japan in the long term. This is behind the insider tip Preferred Networks.
• AI market with upheavals
• Ki-Einhorn Preferred Networks wants to establish itself in the AI area
• Prominent supporters
When it comes to artificial intelligence (AI), which has become increasingly important in recent years, some tech sizes have secured important parts of the highly competitive market. With its powerful AI chips, the US company NVIDIA is still the greatest profiteer of the ongoing AI boom. The Chinese Ki Startup Deepseek then provided the first upheavals on the market, which presented its Ki-Totroboter Deepseek R1 at the beginning of this year, which therefore comes with relatively favorable development costs and thus produced completely new prices on the AI market.
Ki-Einhorn Preferred Networks in portrait
The Japanese Ki-Einhorn Preferred Networks should be less well known in the field of artificial intelligence, although the company has been working in this area for years: “In the past 10 years we have worked to use AI to solve problems in the real world,” said Daisuke Okanohara, Chief Executive Resear, Managing Asia ‘. The company focuses on different areas such as truck traffic, healthcare and robots.
Preferred Networks is one of the few unicorns in Japan, writes the news portal with reference to corresponding data from the International Monetary Fund. One speaks of a unicorn when a startup has reached a billion rating, is privately owned and is not listed on the stock exchange.
AI solutions for the real world
According to its own website, the startup has specialized in realizing “practical applications from deep learning and other new technologies”, “to solve real problems that are difficult to master with existing technologies.” It also says: “We make cars, robots and other devices more intelligent by connecting software and hardware in a sophisticated way. By making devices so intelligent that they can adapt to constantly changing environments and conditions, our world can be predicted by the real-time recording of the physical world.”
Prominent supporters
And the unicorn has already found prominent supporters. In 2015, the Japanese autotota autotota was investing a billion yen in the startup and added another 10.5 billion yen in 2017. As can be seen in the company’s website, Preferred Networks took 19 billion yen in the recent round of financing in December 2024, which wants to use the company to strengthen its development of AI-Halbreifer.
In addition, Preferred Networks, together with the Japanese mixed group Mitsui & Co., runs a joint venture that is dedicated to the area of autonomous driving. This is particularly about tackling the challenge of long working hours of truck drivers. “The problem in the world of logistics is that the working hours are extremely long. You have to drive for many hours, and sometimes you have to go to the night late. However, there is the problem in Japan that the number of truck drivers decreases,” explains PFN CEO Toru Nishikawa according to CNBC. However, the startup here is also clearly limited to the area of trucks, since there is a strong competition in the auto industry as a whole, Okanohara adds: “If we tackled the problem of normal cars, it would be extremely difficult. There are many companies working on autonomous driving, and it is a very competitive field”.
In December 2024, the startup also announced by means of a press release to set up another joint venture with Mitsubishi and Internet Initiative Japan (IIJ) that will work in the field of AI cloud computing.
Real solutions need time
Preferred Networks currently faces the challenge that compared to other AI solutions in digital space, it takes more time to tackle problems in the real world. However, it is “relatively easy to achieve success with users,” Okanohara told CNBC. Therefore, the startup continues to write red numbers. CEO Nishikawa assumes that it should take a few more years for the company’s technologies to throw money, as he explains when asked by the news portal. So it sees a time horizon of up to five years in the area like AI-based materials research.
“First of all, we start with the joint research with companies and then check whether the technology can be marketed or not. As soon as we find that it can be marketed, we are working on developing services and products that can be offered to customers,” he said, adding that “this process takes about three to five years before it is marketed and introduced practically.”
IPO in the future
With a view to AI, the group of corporations followed the development of Deepseek with interest and assumes that there will very soon be many more players in the area. This also wants to include Preferred Networks itself. Nishikawa says that Nvidia’s AI strategy has so far worked well, but there is still room for improvement in the design of the graphics processors. Preferred Networks is to develop “more advanced processors” in order to achieve a competitive advantage.
On its way up, the company now has an eye on the international market, since according to the CEO, it would have recognized that “there are limits for what we can do in Japan alone, and the world market is much larger than the Japanese market”. In the long term, an IPO is also planned, but only when “the need for large funds” is given. According to Okanohara, this will probably happen, “if we introduce our hardware products, such as half-lever, to the world. So I think we will strive for the IPO at this time.” Here, too, he sees a time horizon of three to five years.
Editor finance.net
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