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SoftBank is under pressure from a legendary activist investor after a series of bets on money-losing startups backfired on the Japanese tech giant.

New York-based Elliott Management revealed Thursday it has built a “substantial” stake in SoftBank (SFTBF), the firm run by billionaire Masa Son known for its $100 billion Vision Fund.

Although SoftBank has long been a superstar in the tech world, lately it has come under scrutiny for investments in WeWork, Uber (UBER) and dog walking startup Wag.

Elliott, one of the world’s most successful activist investors, said in a statement that it has held private talks with SoftBank leadership aimed at making changes to improve performance at the Japanese firm.

The negotiations have begun on a constructive note, people familiar with the matter told CNN Business.

“This is not a contentious discussion,” one of those people told CNN Business.

SoftBank and Son’s leadership style have been under pressure because its market value is below that of the combined value of its investments in major companies, including significant stakes in Alibaba (BABA), Sprint (S) and Slack (WORK). That discount is a signal that all is not well at SoftBank.

“Elliott’s substantial investment in SoftBank Group reflects its strong conviction that the market significantly undervalues SoftBank’s portfolio of assets,” Elliott said in the statement.

SoftBank said in a separate statement that it “welcomes feedback” from shareholders and is in “complete agreement that our shares are deeply undervalued by public investors.” The company added that it “always maintains constructive discussions with shareholders.”

The talks have included meetings between Elliott executives and Son, a source told CNN Business.

Elliott, founded by billionaire Paul Singer, did not disclose the size of its stake in SoftBank nor specific steps it wants the company to take.

However, The Wall Street Journal reported that the investment amounts to more than $2.5 billion, or around 3% of SoftBank’s entire market value. The paper said Elliott is pushing for up to $20 billion in share buybacks and improvements in SoftBank’s corporate governance.

Neither SoftBank nor Elliott would comment on the details of the talks.

In some ways, the tables have turned on SoftBank, which has long wielded vast power through its mega tech fund. Now, SoftBank is the one under pressure by a well-heeled investor.

SoftBank has suffered a number of stumbles in recent months, most notably the flameout of former tech darling WeWork, which was forced to abandon its IPO last year. Son admitted he learned a “harsh lesson” from the collapse in WeWork’s valuation.

Another SoftBank-backed company, rider hailing giant Uber, fared poorly in its highly-anticipated IPO last year.

And SoftBank also announced plans to abandon a $300 million investment in dog-walking startup Wag.

The recent troubles led SoftBank to report its first loss in more than a decade.

Elliott is widely viewed as one of the most successful activist investors, a type of investment firm that aims to persuade management teams to make sweeping changes aimed at reviving stock prices.

The SoftBank campaign is the biggest move by Elliott since its investment last year in AT&T (T). (AT&T (T) owns CNN’s parent company WarnerMedia.) AT&T (T) and Elliott reached a truce last October that included a pledge by the company not to make any major acquisitions.

“I’ve always said, if you’re going to have an activist in your stock, you oughta get a really good one,” AT&T CEO Randall Stephenson said in a telephone interview with CNN Business at the time. “And these guys are pretty good.”

CNN Business’s Sherisse Pham contributed to this report.