SoftBank profit more than doubles to $16.6 billion on OpenAI gains

By Anton Bridge

TOKYO (Reuters) -SoftBank Group Chief Executive Masayoshi Son's "all in" stake connected OpenAI appears to beryllium paying dividends aft the ChatGPT-maker's valuation soared this year, producing a surge successful quarterly nett for the Japanese ​technology investor.

The results mean much wealth for SoftBank to employment successful its artificial intelligence-related concern spree adjacent arsenic concerns equine of an "‌AI bubble" successful which valuations overestimate the profits the technologies tin generate.

SoftBank reported connected Tuesday second-quarter nett net much than doubled to 2.5 trillion yen ($16.6 billion), ‌driven by valuation gains successful its OpenAI holdings.

It has besides stepped up fundraising activities, selling equity holdings, specified arsenic the remainder of its shares successful Nvidia for $5.83 billion, arsenic good arsenic issuing bonds and taking retired bridging loans.

The 2nd 4th net coincide with a bull tally successful technology-related stocks that has sent SoftBank's stock terms to grounds highs. SoftBank announced a four-to-one banal divided to marque its shares much accessible aft they astir quadrupled successful worth implicit the ⁠past six months.

AI BOOM OR BUBBLE?

As the question of concern ‌in artificial quality infrastructure specified arsenic information centers continues apace and frontrunners successful AI improvement specified arsenic OpenAI task accelerated growth, SoftBank has been a large beneficiary.

Nevertheless determination are increasing concerns among investors astir an "AI bubble", wherever the ‍enormous sums committed to superior concern by starring firms whitethorn not make the precocious profits to warrant the investments.

Losses are mounting astatine OpenAI, sources told Reuters successful October, though its valuation has risen steadily and sharply passim the year.

"There are assorted opinions but SoftBank's presumption is that the hazard of not investing is acold greater than the hazard ​of investing," Chief Financial Officer Yoshimitsu Goto told a property briefing successful Tokyo.

In March, SoftBank agreed to pb a backing circular of up ‌to $40 cardinal successful OpenAI astatine a valuation of $300 billion. In October, a root told Reuters SoftBank was among a consortium of investors acquiring $6.6 cardinal worthy of shares from OpenAI employees astatine a higher valuation of $500 billion.

SoftBank's full concern successful OpenAI is expected to scope $34.7 cardinal by the extremity of December this year.

SoftBank's Vision Fund portion posted an concern summation of 3.5 trillion yen, chiefly from the group's holding successful OpenAI which totalled 2.16 trillion yen for the quarter.

The results announced connected Tuesday compared with a nett of 1.18 trillion yen successful the aforesaid play past year,⁠ and were SoftBank's champion quarterly effect since July-September 2022.