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Samsung’s share price has continued to exhibit a solid upward trend in spite of the legal troubles of its Vice Chairman

I sent a text message to a friend of mine in Silicon Valley and mentioned that I’d heard that Samsung Electronics had failed to acquire an artificial intelligence (AI) firm. My friend – an old hand in the US tech community and the founder of a startup – sent me the link to a website. The link showed a list of companies that were being invested in by Samsung Venture Investment Corporation, the venture capital wing of Samsung Electronics.

The list showed that last month Samsung Venture Investment had invested millions of dollars in a semiconductor and electronics firm and in a startup with visual recognition technology that could be used in the Internet of Things and self-driving cars. The company also invested US$13 million in a company with AI and machine learning technology in May and US$37.5 million in a network company in April. Samsung Venture Investment has a stake in a total of 115 companies, adding six companies to the list this year.

“Samsung Electronics may not have acquired an AI company, but it continues to keep an eye on and invest in such companies. Samsung was recently recruiting people to handle its AI operations,” my friend said, adding that “it doesn’t make sense for the absence of the vice chairman to prevent them from investing.”

On Aug. 29, South Korea’s conservative press ran articles claiming that Samsung had shelved plans to acquire an AI startup because Samsung Electronics Vice Chairman Lee Jae-yong is in prison. The articles trumpeted concerns about the “management vacuum” at Samsung, warning that Samsung was “helpless” to stop Google and Apple from absorbing AI technology and talent and that rival IT firms were gobbling up AI companies.

“Samsung has big names like Young K. Sohn and David Eun, and I think they have the discretion to move forward with investments,” said Lim Jeong-uk, who formerly ran an IT firm in the US and is currently directing the Startup Alliance. Sohn is president and chief strategy officer at Samsung Electronics, while Eun is president of Samsung Next. “Sometimes companies keep acquisitions quiet to avoid provoking their rivals.” At the beginning of the year, David Eun set up a fund in the US worth 180 billion won (about US $163 million) and announced that the fund would begin investing in startups related to AI and the Internet of Things.

The Samsung Electronics main office is hard at work as well. On Aug. 28, it decided to invest US$7 billion in expanding its semiconductor production facility in Xi’an, China, in response to increasing demand. In May, a meeting of all the executives in Samsung Electronics’ wireless business division (which makes smartphones) released a vision for 2020.

To be sure, carrying out major M&As (like the US$8 billion acquisition of Harman) while Lee is behind bars will entail difficulties throughout the process, including the decision-making stage. But the concerns that Samsung is going to be paralyzed because of the leadership vacuum are exaggerated. And if the company really can’t do anything without its owner, it was a mistake to create that kind of management structure in the first place. After Lee’s strategy of pretending to know nothing during his trial, I’d like to know whether Samsung is really going to increase uncertainty by presenting itself as a company that is falling behind in the competition.

By Lee Wan, staff reporter

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