SoftBank quarterly profit falls 18% despite big Intel gains

SoftBank Group reported a smaller-than-expected 18% decrease in first-quarter profit on Thursday, despite gaining from its stake in chipmaker Intel. The investment and technology conglomerate recorded a record net income of over 5 trillion yen ($31.70 billion) in the previous year, largely due to the rising value of its ChatGPT holdings.

CEO Masayoshi Son, through SoftBank, is heavily investing in AI as global interest grows. CFO Yoshimitsu Goto addressed concerns of a bubble in AI data center development during a press conference in Tokyo, stating that demand is clear and supply is limited. SoftBank's net income for the April to June period was 347.3 billion yen, with the majority of the investment gain attributed to its shareholding in Intel.

The company also gained from its stake in ByteDance, the parent company of TikTok. SoftBank's cumulative investment in OpenAI, the developer of ChatGPT, is set to reach $64.6 billion by October, constituting around 13% stake, with a total investment gain of $45 billion. The company has secured a $10 billion loan using its OpenAI stake as collateral, and has arranged margin loans on its holdings in Arm and SoftBank Corp. Son has sold off assets like Nvidia and T-Mobile as he bets on AI-related companies, with SoftBank committing further investments in OpenAI, ABB's robotics business, and DigitalBridge.