SoftBank profits more than double as AI valuations soar

Masayoshi Son’s SoftBank Group said net profit more than doubled in its second quarter and announced a four-to-one stock split on Tuesday as valuations of artificial intelligence companies soar alongside growing fears of a bubble.

Net profit at the AI-invested company was ¥2.5tn ($16.2bn) in the quarter to the end of September, far above analysts’ expectations of ¥207bn, according to LSEG data and the ¥1.2tn recorded in the same period last year.

The profits were driven by the group’s tech-heavy Vision Fund, which recorded an investment gain of ¥2.8tn in the quarter from stakes in OpenAI and PayPay.

Son has bet his reputation on a series of huge investments aimed at turning SoftBank into a critical player in AI, a technology he believes will shape “humanity’s future”.

Alongside his ownership of UK chip designer Arm, Son has invested in OpenAI, Nvidia and Oracle. He most recently bought ABB’s robotics arm in a deal valuing the business at $5.4bn.

SoftBank’s shares have more than doubled this year to over ¥22,000, driven by its investment in OpenAI, making Son Japan’s richest man.

The company on Tuesday said the stock split, which will take effect on January 1, will make the shares “more accessible to investors and further expand its investor base”.

Last month the ChatGPT maker completed a long-awaited restructuring, unlocking a second tranche of investment from SoftBank and the possibility of an eventual public listing.

This is a developing story.