Rakuten CEO Defends Mobile Venture, Bets Big on AI with Exclusive User Data

Rakuten founder defends costly mobile foray with big AI bet

Rakuten's chief dismissed skeptics who call the Japanese e-commerce pioneer's mobile foray a mistake and said the telecom arm is central for future growth through artificial intelligence. A decision to enter Japan's cutthroat wireless market has saddled Rakuten with four years of losses, weighing on its cash-churning online shopping mall and finance operations. But that mobile arm and its 8 million-plus users help train an AI poised to expand the conglomerate's business, according to billionaire founder Hiroshi Mikitani. The amount of exclusive data Rakuten gathers from its users is "extremely powerful," Mikitani said in an interview. "We have no intent to compete against OpenAI or Google. But we will actively build a more vertically integrated, specialized AI."

Rakuten Billionaire Justifies Mobile Arm Losses with Big AI Bet

Rakuten Group Inc.'s chief dismissed skeptics who call the Japanese e-commerce pioneer's mobile foray a mistake and said the telecom arm is central for future growth through artificial intelligence. A decision to enter Japan's cutthroat wireless market has saddled Rakuten with four years of losses, weighing on its cash-churning online shopping mall and finance operations. But that mobile arm and its 8 million-plus users help train an AI poised to expand the conglomerate's business, according to billionaire founder Hiroshi Mikitani.

Mikitani Justifies Mobile Arm Losses with Big AI Bet

Rakuten Group CEO Hiroshi Mikitani is dismissing skeptics who call the Japanese e-commerce pioneer's mobile foray a mistake and said the telecom arm is central for future growth through AI. Mikitani says the data gathered from its users is "extremely powerful." He spoke exclusively to Bloomberg's Shery Ahn in Tokyo. (Source: Bloomberg)

Rakuten: Mobile Business Provides 'Extremely Powerful' Data to Train AI | PYMNTS.com

Rakuten Group expects the data gathered by its mobile business to help train artificial intelligence (AI) will deliver benefits across the conglomerate's operations. For example, the company is set to launch an AI assistant that serves as a travel and shopping agent for customers, Bloomberg reported Sunday (Jan. 19). "We have no intent to compete against OpenAI or Google," Rakuten CEO Hiroshi Mikitani said in the report. "But we will actively build a more vertically integrated, specialized AI." While Rakuten's online shopping and finance operations are successful, the Japanese company's mobile arm has operated at a loss for four years, according to the report. However, Mikitani said the mobile arm's 8 million customers have helped Rakuten gain exclusive data that is "extremely powerful," per the report. Rakuten has also found that the users of its mobile network spend almost 50% more than other customers on its online shopping mall and engage with the company's credit card, travel, banking and brokerage operations, the report said. eCommerce giants have long relied on vast troves of customer data to power their AI-driven recommendation engines and personalized shopping experiences and have struggled to find new high-quality data sources as they exhaust this low-hanging fruit, PYMNTS reported in July. This scarcity is pushing businesses to explore innovative data collection methods, such as leveraging Internet of Things (IoT) devices for real-time consumer behavior insights. With this data, companies can use AI to extract valuable insights that reshape industries and drive decision-making across the corporate landscape. Companies are using AI-powered data mining techniques to gain a competitive edge in areas ranging from predicting consumer behavior to optimizing supply chains. In another recent move, Rakuten said in May that it was expanding its cashback shopping platform to include a membership program called Rakuten+ that was created specifically for designer brands. Rakuten+ aims to connect these brands with select, highly engaged Rakuten members, offering them access to the most loyal and active shoppers of designer fashion on the platform.