SoftBank Group records net profit of $2.9B in Q1
What's the story
Japanese tech investor SoftBank Group has reported a net profit of ¥421.8 billion ($2.87 billion) for the April-June quarter. The result marks a major turnaround from last year's loss of ¥174.3 billion during the same period and beats analysts' average profit estimate of ¥127.6 billion, according to LSEG data. This is SoftBank's second consecutive profitable quarter after its first annual profit in four years, driven by strong telecom holdings and improved valuations for later-stage start-ups.
Investment success
Vision Fund investment unit contributes to profits
The Vision Fund investment unit of SoftBank contributed significantly to the company's profits with an investment gain of ¥726.8 billion ($4.94 billion). The results come as a relief to investors as SoftBank is in the middle of its biggest spending spree since launching its Vision Funds in 2017 and 2019. This time, the company is making huge investments in artificial intelligence (AI) companies.
Investment strategy
SoftBank leads $40B funding round for OpenAI
SoftBank is leading a $40 billion funding round for OpenAI, the company behind ChatGPT. The Japanese conglomerate has until the end of this year to fund its $22.5 billion share of the investment. It is also financing Stargate, a $500 billion project to build data centers in the US. However, details about potential returns from these projects or how they will be funded remain unclear at this time.