Preferred Networks

Executive Summary

Preferred Networks is the most valuable private technology startup in Japan focused on artificial intelligence. It uses a business model where it controls everything from the start to the finish, pairing its own smart software with custom-made MN-Core computer chips that are designed to save electricity. The business currently brings in 180 million dollars in sales every year by working closely with partners in factory robots, self-driving cars, and the search for new medicines. Even though the company has great technical skills, it still does not make a profit and lost 45 million dollars recently because it spends so much money on basic research and development. The company hopes that using its own special chip design will create a protective competitive advantage based on using less energy for big calculations. Investors have to weigh the company's important role in Japan’s national business plan against its ongoing money problems and the chance that technology will move on without them. A future public stock listing would give people a rare chance to invest in Japanese high-tech research, though the point where they stop losing money is hard to see because they keep putting all their cash back into new projects.