SoftBank earnings report 2Q | USAEMALL.com

SoftBank‘s continued push into AI with investments in ChatGPT maker OpenAI and PayPay helped the Japanese giant post a $19 billion gain on its Vision Fund in its fiscal second quarter.

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).

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 2.2 trillion yen ($14.3 billion) in the quarter.

“The reason we were able to have this result is because of September last year, that was the first time we invested in OpenAI,” said SoftBank’s Chief Financial Officer Yoshimitsu Goto during an investor presentation. He added, in comments translated by the company, that OpenAI’s latest valuation milestone of $500 billion marks one of the largest valuations in the world, according to fair value.

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.

“Our share price recently has been going up and down dynamically… we want to provide as many invest opportunities as possible,” said Goto.

Here’s how SoftBank fared in the fiscal second quarter:

• Profit more than doubled to 2.5 trillion yen in the quarter, versus 206.89 billion yen expected, according to LSEG consensus estimates. It also compares to 1.18 trillion yen profit a year earlier.
• Revenue was 1.92 trillion in the quarter, in line with an LSEG estimate of 1.9 trillion yen.

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.

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.

— CNBC’s Arjun Kharpal contributed to this report.