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Robots have entered a new phase — and Cathie Wood is betting on it

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A hefty bet by Cathie Wood’s Ark Invest Space Exploration fund on a 100-year-old Japanese company; a trade show of enormous, growling mining vehicles in Las Vegas; SoftBank’s Masayoshi Son doing his best to foist the word “Smabo” on planet Earth from the deck of a pretend star cruiser.

It is, in some respects, a great time to be a robot.

The flashiest of these three signals was always likely to come from Son — a rare Japanese business leader with the brazenness to celebrate defeat as triumph. He did this during the opening address last week at SoftBank World, an annual jamboree for clients of his technology conglomerate. Son’s topic was robots, which was a courageous choice considering the humiliating retirement a few months back of SoftBank’s flagship automaton, Pepper, the company’s slashed investment in Boston Dynamics and the absence of any Japan robotics investments by the $100bn Vision Fund. 

Braver still was to begin the speech, which saw Son superimposed on to the interior of a Kubrickesque spaceship, with a slide of Pepper slumped in defeat. Time to learn and move on from these primitive toys, ran the message, and to fight even harder for a future of AI-turbocharged smart robots, or Smabo, as few other than Son are likely to call them.

Despite his zeal the speech was not an upbeat hour. Japan’s most prominent tech guru clearly fears that the country, for all its reputation and expertise, is in danger of missing a starring role in our Smabo destiny unless it acts more quickly than it currently is. “We need to have more than just the good old days,” he said, chilling the fake starscape with the message that a nation’s technologically pioneering past is no guarantee of a future. 

A contrast with these misgivings, though, has been the hearty conviction with which Cathie Wood, the chief executive of Ark Invest and one of the world’s most closely watched investors, has staked her faith in Japan’s ability to lead a tech-centric global industrial revolution. She has done this through a substantial investment in Komatsu, a company whose diggers, dump trucks and dozers heavily populate the world’s mines and construction sites. The stock, as of last week, is the seventh most heavily-weighted stock in Ark’s Autonomous Technology and Robotics ETF (with twice the weighting of its US rival Caterpillar), and, in what some see as a greater stretch, the eighth in Ark’s Space Exploration and Innovation ETF.

Long-term watchers of Komatsu may guess what Wood has seen in the company. It is not a robot-maker in any conventional sense, but a consistent pioneer in the business of empowering vast machines with the kind of communications, data-gathering and data-processing tools that make their operations more efficient now and could ultimately lead to many of them becoming human-free. Or, in all practical senses, robots.

As it has honed these skills, Komatsu has pushed further and faster than its rivals into rolling-out autonomous dump trucks, pre-excavation surveillance drones and the first generation of what it calls “smart construction” sites where automation will ultimately end the need for humans. The company has not, to date, said much about space exploration.

At a conference hosted by Mizuho this month, Wood praised Komatsu’s aggressive approach to autonomous technology, and provided a telling glimpse of her thinking. The Ark space fund, she said, involves not just orbital but suborbital space, which includes the drones that Komatsu is increasingly making a permanent feature of domestic construction sites. “Robotics, energy storage, artificial intelligence. Those are all being embraced by Japan,” she said.

Komatsu, notes Edward Bourlet, an analyst at CLSA, has also made an important shift of tone. Last week’s MinExpo in Vegas is the biggest of the industry showcases and has traditionally been taken by Komatsu as an opportunity to present the latest mechanical colossi in its portfolio. This time, pitching its wares at a mining industry under huge ESG-investor related pressure to be greener, Komatsu was selling a story focused far more on the efficiency-centred software behind its mammoths.

What Son, Wood and Komatsu all appear to have grasped is that robots, as a concept and a focus of the most valuable effort, are entering a distinct new phase. Success is now defined more by context than capability. Pepper waving its articulated arms at shop customers is not really a robot but, when it eventually happens, a driverless dump truck politely making way for an autonomous excavator in a human-free mine will be. 


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