Global technology group Prosus is ramping up generative artificial intelligence (AI) capabilities across its operations, with plans to buy companies that operate in that space.
Generative AI is software that can produce text, images, audio and data based on text instructions and is changing the face of content creation.
Speaking at Prosus’s year to end-March results presentation on Tuesday, CEO Bob van Dijk said: “We have been very close to generative AI, long before the ChatGPT became a publicly available resource.”
ChatGPT is one of the most popular consumer AI applications.
Van Dijk said the group has prioritised AI across its portfolio. “We've been completely embedding it in our workflow for the last five years. So in 2018, we created our own AI lab and since then it's been supporting group companies to accelerate machine learning and AI.”
Prosus has developed an AI assistant called Plus One, which is being used by 4,000 people across the group, he added.
At Prosus classifieds subsidiary OLX, AI models have helped to drastically reduce marketing campaign costs, while at food delivery business iFood, the tools are used to provide a personalised offering to customers. That has improved the reliability and efficiency of the food and grocery delivery process, said Van Dijk.
For its education technology businesses, Prosus said AI can be used to, among other things, develop highly personalised learning through customising content based on individual needs. The software analyses a person’s learning patterns to generate lessons, tests and materials adapted to their level, style and pace.
“Things are moving quickly and we also continue to look at early-stage AI companies.”
Van Dijk said new or newer companies will use generative AI to disrupt existing business models in the same way Uber changed the taxi business and Spotify the music industry.
“Going into a transition period like that, where I know technology adoption will be at the speed of light, with substantial cash flexibility, is a fantastic position to be in because I'm convinced there will be newer companies that will embrace GenAI better than many incumbents. I think those will be companies we'd be very interested in. And I also think it will create massive opportunities for potential M&As.”
The step change in AI technology, said Van Dijk, “is probably even larger than that of the mobile phone. It's probably the order of the magnitude of the internet. So big changes ahead. There will be new winners and those new winners are the companies we're looking for.”
This week Prosus announced it will remove the cross-shareholding structure with parent company Naspers. The move is aimed at simplifying the business structure that was implemented in 2021 to reduce Naspers’s relative size on the JSE. However, the structure added a layer of complexity, said van Dijk.
Things are moving quickly and we also continue to look at early-stage AI companies
Naspers’s ownership of shares in Prosus will remain at 43% and it will retain 72% voting rights.
Peter Takaendesa, head of equity at Mergence Investment Managers, said: “The key outcome of this proposed transaction is not the simplification itself, but the fact that Naspers will now be able to continue with its open-ended share buyback programme, which is positive for shareholders over the long term. It is also quite likely that there will be additional group structure simplification steps over time.”
Asked by an analyst what other value creation mechanisms the company is planning, Van Dijk said besides the continued buyback and getting the e-commerce business to profitability, “we are very keen to demonstrate and crystallise the value of assets in our portfolio, and it could take several forms”.
“It could be an IPO of several of our businesses, which we think is definitely possible when the environment improves. It could also take the form of a sale of assets. It could be M&A. It could be an unbundling.”
He said several of the businesses were in a position “to be properly valued by the market”.
“And we look at a broad range of ways to crystallise that value and potentially give some of that back to our shareholders.”
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