TOKYO: SoftBank Group Corp reports a smaller-than-expected decline in quarterly net income, lifted by a big boost from its stake in Intel Corp while it awaits an OpenAI listing.
The Tokyo-based tech investor booked a 1.3 trillion yen (US$8.5bil) investment gain on its Intel shares, which rose 216% in the June quarter.
SoftBank’s US$2bil investment last year in Intel stock at US$23 apiece helped compensate for a lack of valuation gains on OpenAI, the company said.
SoftBank’s quarterly net income fell just 18% to 347.3 billion yen, boosted also by the value of TikTok developer ByteDance.
That was despite declines elsewhere among startups held by the flagship Vision Fund arm. The market estimate was for 166 billion yen, based on the average of four analysts polled.
OpenAI’s Japanese backer is in the spotlight as concerns grow about climbing debt levels that it and artificial intelligence (AI) service providers are taking on to capitalise on projected demand growth.
Founder Masayoshi Son has directed SoftBank’s firepower across the AI spectrum, raising leverage on its balance sheet and exposing the company’s portfolio to the sector’s extreme volatility in hopes of a long-term payoff.
“We try to stay the course, and try not to be affected by short-term volatility, whether good or bad,” chief financial officer Yoshimitsu Goto said during an earnings conference.
“What’s important is where growth is.”
Enthusiasm for AI-related stocks and companies has been uneven this year.
US contenders OpenAI and Anthropic PBC continue fundraising at a rapid pace but face increasing competition from more affordable Chinese rivals offering comparable performance.
The two San Francisco companies’ valuations are approaching US$1 trillion each, but their business models are being challenged and questions about the payoff on their large investments persist. — Bloomberg
