SoftBank has invested another $10B in OpenAI
What's the story
SoftBank has invested another $10 billion in OpenAI, as part of a larger $30 billion commitment. The investment is through its Vision Fund 2 and comes after OpenAI's recent funding round that saw a total of $110 billion raised at a pre-money valuation of $730 billion. The latest tranche was funded through a bridge loan, highlighting the importance of OpenAI in SoftBank's portfolio.
Financial strategy
Bridge loan funds latest investment
The latest investment is part of a larger $40 billion unsecured bridge loan that SoftBank secured in March for OpenAI investments and general corporate purposes. The final installment of the $30 billion commitment is expected to be injected by October 1.
Market reaction
OpenAI's IPO delay impacts SoftBank's stock
The news of OpenAI potentially delaying its IPO until 2027 has shaken investor confidence. It had already filed confidentially with the US Securities and Exchange Commission (SEC). The delay has affected SoftBank's stock too, which fell over 12%, and Japan's Nikkei index, which dropped by 4%. Despite these setbacks, OpenAI remains one of SoftBank's biggest investments.
Profit surge
SoftBank's net profit surges
SoftBank reported a massive jump in net profit for the January-March quarter. The company's net profit more than tripled to 1.83 trillion yen ($11.60 billion), largely due to the increase in value of its investment in OpenAI. However, its India portfolio remains under pressure with most listed investments losing value except for Lenskart which gained about $100 million during the same period.