Investments in Coupang, DiDi Global and Klarna underperform according to latest results
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Masayoshi Son, SoftBank. Image: Bloomberg via YouTube
SoftBank’s Vision Fund recorded a substantial annual profit of $46 billion (€39.3 billion), mainly thanks to the strong increase in the value of its investment in OpenAI. The Japanese conglomerate has poured more than $30 billion (€25.6 billion) into OpenAI and, in the financial year that ended in March, it booked roughly $45 billion (€38.4 billion) in profit from that company. Remarkably, almost all of the Vision Fund’s profit of around $20 billion (€17 billion) in the three months leading up to March was attributable to OpenAI. That success stands in stark contrast to losses on other investments, such as Coupang, DiDi Global and Klarna.
SoftBank is positioning itself strategically at the forefront of the AI boom by investing in a broad spectrum of AI and chip companies. OpenAI, led by Sam Altman, plays a central role in that strategy. SoftBank has committed more than $60 billion (€51.2 billion) to OpenAI, which would give it a stake of around 13%. More than $30 billion (€25.6 billion) of that commitment has already been invested.
In March, OpenAI completed a funding round led in part by SoftBank, valuing the AI lab at no less than $852 billion (€727 billion). This valuation comes despite fierce competition from rivals such as Google and Anthropic. Although OpenAI’s sky-high valuation has delivered significant gains for SoftBank’s Vision Fund, concerns have emerged about the concentration of that investment within SoftBank’s portfolio and the potential impact on its debt burden.
In March, S&P Global revised its outlook for SoftBank from ‘stable’ to ‘negative’. That decision was driven by fears that the liquidity of its assets, the quality of its portfolio and SoftBank’s financial resilience were likely to deteriorate as a result of the enormous investment in OpenAI. The ratings agency suggested that SoftBank could limit the negative financial consequences by disposing of certain assets.
SoftBank has indeed reduced its stakes in companies such as T-Mobile and Nvidia to finance the investment in OpenAI. Those sales generated $1.4 billion (€1.2 billion) in profit during the financial year, in addition to income from other investments. However, after adjusting for exchange rate fluctuations and costs, SoftBank reported a loss on investment income outside the Vision Fund of 472.1 billion yen (€2.5 billion).
Despite these challenges, the SoftBank Group as a whole posted a net profit of 5 trillion yen (€27 billion) for the year, largely thanks to the robust performance of the Vision Fund and the telecommunications division.
Business AM