The U.S. activist short-seller investor Capybara Research has set its sights on SoundHound AI. This voice recognition AI company has attracted attention with its investment from the American semiconductor company NVIDIA.
On the 22nd, Capybara stated in a short-selling report on SoundHound, “This company is a failed company that spreads lies and deceit. They don’t provide statistics because they can’t make the numbers look good no matter how much they try.”
Capybara argued, “SoundHound introduces its product as a world-class AI on par with ChatGPT developed by OpenAI, but that’s not the case. Their Houndify products use commercial voice recognition to search a manually programmed knowledge graph.”
Adding, “The company’s software is manually programmed and labor-intensive to maintain, often providing incorrect information. As a result, it delivers outdated information to users.”
Capybara further revealed, “SoundHound is hiding the fact that some of its major customers, including Mercedes-Benz, Deutsche Telekom, and Netflix, have left. Maintaining key customers is very important in building a sustainable business for the company.”
“While the company’s fundamentals are deteriorating, the company has inflated revenues and profitability using changed costs in one-time contracts,” Capybara emphasized. “Departing customers paid penalties for contract termination, and SoundHound concealed deteriorating fundamentals by reflecting these penalties in their financial statements as if they were regular transactions.”
Moreover, Capybara conveyed, “SoundHound continues to suffer losses, and there is no clear path to profitability. The company has continued to bleed cash for a year following the merger with a Special Purpose Acquisition Company (SPAC). It is barely surviving by laying off half of its employees.”
SoundHound AI, established in 2005, is a voice recognition AI company. It provides foundational technologies such as automatic voice recognition, natural language processing, and text-to-speech conversion to enable interactive voice assistant services. The company aims to provide voice AI solutions optimized for the services needed in restaurants, cars, smart devices, and call centers.
The company drew attention last month when NVIDIA’s investment was made to this company on public. So far this year, its stock price has risen more than 220%.c
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