SoftBank is riding the AI wave, with a $19 billion gain in its Vision Fund, thanks to its investments in OpenAI and PayPay. But here’s where it gets controversial: the company’s stock has slumped in the past week due to concerns about an AI bubble. Despite this, SoftBank is ploughing ahead with its push into artificial intelligence, investing and acquiring firms that will bolster its presence in robots and Artificial Super Intelligence (ASI).
AI revenues reached “new highs” in the quarter ended Sept. 30 with 93% of annualized growth, Softbank said in a investor briefing on the results. Gains from the company’s investment in OpenAI totaled 2.157 trillion yen ($14 billion) in the quarter. The company also said Tuesday that it will conduct a four-for-one stock split at the end of the year in a bid to make its shares more accessible to investors and to further expand its shareholder base.
But here’s the part most people miss: the broader Vision Fund segment factors in non-investment performance such as administrative expenses and gains and losses attributable to third-party investors. The value of the fund had risen $4.8 billion in the company’s fiscal first quarter. Softbank is ploughing ahead with its push into artificial intelligence, investing and acquiring firms that will bolster its presence in robots and Artificial Super Intelligence (ASI).
The Japanese conglomerate’s stock has slumped in the past week as concerns of an AI bubble sent jitters through global markets. Nearly $50 billion in market cap was wiped out from the stock last week, marking its worst weekly loss since March 2020. However, shares are up over 140% this year as its tech investment arm has showed signs of recovery. Last month Softbank reportedly approved its final tranche of funding to complete its $30 billion investment in OpenAI. The Japanese firm’s investment in the ChatGPT maker came with a caveat — that its total investment could be slashed to as low as $20 billion if OpenAI didn’t restructure into a for-profit entity by Dec. 31.
And this is the part most people miss: The AI startup recently completed its recapitalization, cementing its structure as a nonprofit with a controlling stake in its for-profit business, which is now a public benefit corporation called OpenAI Group PBC. Softbank said in its earning statement Tuesday that it will invest an additional $22.5 billion in OpenAI through its Vision Fund 2 in December.