SoftBank’s Vision Fund recorded a $2.4 billion gain in the fourth quarter, significantly boosted by its investment in OpenAI. This surge in valuation for its stake in the artificial intelligence powerhouse helped to counterbalance losses from other ventures within the fund, including holdings in e-commerce platform Coupang and Chinese ride-hailing giant Didi. The valuation of its investment in TikTok’s parent company, ByteDance, also saw a decline, impacting overall results.
Despite these headwinds, SoftBank Group reported a net profit of 248.6 billion yen ($1.6 billion) for the fiscal third quarter. While this figure fell short of analyst expectations, it marked a substantial turnaround from the net loss recorded in the same period last year. The performance underscores the Vision Fund’s strategic pivot towards AI, with SoftBank aiming to solidify its position at the forefront of this transformative technology by investing in companies it believes will define the future.
A cornerstone of this strategy is SoftBank’s substantial investment of over $30 billion in OpenAI, the developer behind the widely discussed ChatGPT. This commitment represents a significant portion of SoftBank’s capital allocation, with the company currently holding an approximately 11% stake in OpenAI. Over the April to December period, SoftBank recognized a remarkable $17 billion gain on its OpenAI investment alone.
Investors have closely watched SoftBank’s funding strategy, particularly concerning its continued investment in OpenAI, which, like many cutting-edge AI ventures, remains unprofitable. To fuel its AI ambitions, SoftBank has actively divested other assets. Notably, in October, the company sold its entire stake in graphics processing unit (GPU) designer Nvidia for $5.83 billion. Furthermore, between June and December, SoftBank offloaded $12.73 billion worth of T-Mobile stock. The company has also leveraged its other holdings, including its stake in chip designer Arm, to secure financing through loans. As SoftBank doubles down on OpenAI, it faces increasing competition from established tech giants like Google and emerging AI players such as Anthropic, intensifying the race for AI dominance.
SoftBank has also reorganized its reporting structure to highlight its growing presence in the semiconductor industry. The company has established a new segment, the “AI Computing Segment,” which encompasses its chip design subsidiary Arm, along with recently acquired semiconductor firms Graphcore and Ampere. This segment incurred a loss of 91.8 billion yen in the nine months leading up to December, attributed to increased headcount and acquisition-related expenses for Ampere.
However, SoftBank views Arm and its other semiconductor investments as critical enablers for advancements in various high-growth sectors, including robotics, autonomous vehicles, and data centers. The company’s recent stock performance has seen a surge, buoyed by strong results from its telecommunications division and a notable rally in Arm’s stock price, reflecting renewed investor confidence in SoftBank’s strategic direction, particularly its deep commitment to the burgeoning AI landscape.
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