SoftBank posts $46 billion Vision Fund gain as OpenAI stake drives profit to $32 billion

SoftBank posts $46 billion gain at Vision Fund driven mainly by massive OpenAI bet

SoftBank booked a yearly gain of $46 billion at its Vision Fund driven mainly by the huge rise in value of its investment in OpenAI. The Japanese giant has invested more than $30 billion in OpenAI, with its investment gains in the company totalling $45 billion in the year ended March. In the three months to the end of March, the Vision Fund saw a gain of around $20 billion, which was nearly all driven by OpenAI as SoftBank suffered losses on other investments such as Coupang, DiDi Global and Klarna. SoftBank is looking to position itself in the center of the artificial intelligence boom with investments across various AI and chip companies, and Sam Altman's OpenAI forming the centrepiece. SoftBank has committed to invest more than $60 billion in OpenAI which would give it around 13% ownership of the company, the company said in February. More than $30 billion of that as already been invested. In March, OpenAI closed a funding round that was co-led by SoftBank and that valued the AI lab at $852 billion. While the rising valuation of OpenAI has helped SoftBank's Vision Fund, the concentration of OpenAI in SoftBank's portfolio has raised concerns around its debt load. In March, S&P Global Ratings revised its outlook for SoftBank from "stable" to "negative." The ratings agency said SoftBank's "asset liquidity and quality of its portfolio, and its financial capacity are likely to deteriorate because of its additional huge investment in OpenAI." SoftBank could "limit negative financial impacts" by selling some assets, the ratings agency said. Indeed, SoftBank has been selling down stakes in companies like T-Mobile and Nvidia to fund its OpenAI bet.

SoftBank profit quadruples to $32 bn on AI investments

Tokyo (AFP) - Japan's SoftBank Group said Wednesday its annual net profit quadrupled to more than $30 billion, boosted by its investments in AI. Tech investor SoftBank, a major backer of ChatGPT maker OpenAI, posted net profit of five trillion yen ($32 billion) for the fiscal year ending in March, up from 1.15 trillion yen a year earlier. The gain from investment in OpenAI contributed to the earnings, it said. "OpenAI's enterprise value has grown significantly, just as we had anticipated," company CFO Yoshimitsu Goto told reporters. The gain from its OpenAI investment exceeded six trillion yen, but selling, general, and administrative expenses increased, according to the company. In February, SoftBank said it would increase its investment in OpenAI by $30 billion, raising its ownership to 13 percent from 11 percent. Amid the intensifying AI race, Goto said on Wednesday that SoftBank "remains focused on its efforts with OpenAI", when asked about potential investments in rivals such as Anthropic. The company is also advancing its push to build AI data centres, announcing plans in March for a major new gas-fired power plant in the US state of Ohio to supply them with energy. On Monday, Bloomberg reported that Masayoshi Son, the company's flamboyant CEO, has held talks with French President Emmanuel Macron on unveiling an ambitious AI-focused data centre project in France in coming weeks. Son is considering investing several billion dollars in the country as part of a broader rollout of SoftBank's AI infrastructure, according to Bloomberg, with the CEO floating the idea of investing up to $100 billion. Data centres that can train and run chatbots, image generators and other AI tools are being built on a dramatic scale worldwide as an investment boom into the fast-evolving technology shows no sign of slowing. In an effort to diversify its positions within AI, SoftBank also acquired last year US semiconductor designer Ampere Computing and the robotics division of Swiss-Swedish industrial giant ABB. It also announced in December it would acquire DigitalBridge for $4 billion, a US private equity firm specialising in technology infrastructure. SoftBank's earnings often swing dramatically because it invests heavily in tech start-ups and semiconductor firms, whose stocks are volatile. As usual SoftBank did not issue a forecast for the full fiscal year.