Softbank
· SFTBY
May 13th, 2025
Unidentified Company Representative
Thank you very much for waiting, everyone. Now we would like to start the SoftBank Group Corp. earnings results announcement for the fiscal year ended March 31, 2025. First of all, I would like to introduce today's participants. From left, we have Yoshimitsu Goto, Board Director and CFO; Kazuko Kimiwada, Corporate Officer; Chief Sustainability Officer, Senior Vice President and Head of Accounting Unit; Navneet Govil, CFO; SB Investment Advisers and SB Global Advisers; Jason Child, Executive Vice President and CFO Arm. Today's announcement is live broadcast over the Internet. Now I would like to invite Yoshimitsu Goto to present you the earnings results and business overview.
Yoshimitsu Goto
Good afternoon, everyone. Thank you very much for sharing the time with us today. So today is kind of a summary for the fiscal year, a whole year, full year. So let me dive into presentation. So the past 1 year, economical trend, market environment, it's been very uncertain, very unclear, continues to grow. U.S. tension has been escalated. Market, including Japan, has been confused with the situation.
At the same time, unfortunately, we've been seeing the ongoing conflicts across the regions. And after Mr. Trump assumed President, there are many policies, direction changes, which also impacted to the market. But of course, leaders, head of the countries, they always focus on the prosperity of their own country. But when you think about the worldwide peaceful system optimal for everyone, which everyone has been enjoying the free trade in the past, but the free trade also making some disadvantage as well. And from that sense, U.S. position is not always selfish. Cost for maintaining the peace in global wide is something that we need to focus.
Otherwise, we cannot really solve the situations. And I believe tariff is one of the options for that solution as well. So I believe that's something that we need to focus -- refocus once again from the market and financial industry as well. And under such circumstance, how are we going to do in SoftBank Group? Without any change, we keep focusing on our corporate philosophy of information revolution, happiness for everyone. This marks 44th year since the foundation of the business. So from the beginning of the company -- beginning of the business, we started with the distribution of PC software. And that was the motivation to start the business by Mr.
Son. And gradually, we start revisiting what is the information revolution every time and then. Information revolution right now is AI revolution from AGI to ASI, how can we benefit society and the people and how can we address, and how can we play the role for such changes. That's the kind of the things that we always need to pay attention to. And this has been used for the AGM last year. So to make this ASI realized, there are 4 things that we need to focus right now. First is the AI chip. This is going to be the core of the AI so that the Arm and other companies need to focus on AI chip; and also robotics, which also requires data center to support for the evolution of the AI and also the generative AIs.
And for that, we need energy. So those are the agenda that we've been thinking for the past few years. And this year, I believe that it's been a year of green shoots. More specifically, I believe these are the actions that we made based on that understanding. First that we announced the Stargate Project in partnership with OpenAI, Oracle, MGX and at the same time, announced Cristal intelligence with a partnership between SoftBank Corp and OpenAI. And additional off loan investment in OpenAI has been committed and up to $30 billion upon full syndication. And also decided to acquire Ampere for $6.5 billion. That's a part of our strategy for the future growth of our AI strategy revolution, and that is expected to be closed in second half of 2025.
So we were able to make such big steps in this fiscal year. And many people wondered what SoftBank doing? What are you going to do? There are many questions also concerned about what we are going to do. But this time that we were -- with this fiscal year, we were able to show what is the action that we are taking. And for the fiscal year 2024, as a financial summary-wise, these are the highlights. First of all, we've been seeing the weaker performance of tech stocks, so that we've been seeing also the big market volatility. And net asset value at the end of March, JPY 25.7 trillion, down JPY 2.1 trillion year-over-year.
But still JPY 25 trillion net asset value with the high liquidity, which I believe is the only one company in Japan, which has a high liquidity in net asset value. Also maintaining financial policy on loan-to-value and cash on hand, no change for the fiscal year 2025 as well. And net income of JPY 1.15 trillion, up JPY 1.38 trillion year-over-year, first profit in 4 years. As an investment company, most important KPI has been bit different from enterprise value, I believe. However, still, net income -- having a net income profitability is very good thing. So I believe we are very happy to see this profit in 4 years. And progress towards realizing ASI, so that's target announced following investment in Open AI. Quite a large number, amount has been announced.
These are the highlights for the fiscal 2024. Key indicators. These 3 indicators we always revisit with you. Net asset value, as you saw, JPY 25.7 trillion, loan-to-value 18.0% compared to last year, March end, 8.4%, 10% point increase. But at the same time, we have a guidelines of the 25% for loan-to-value, a safety level so that we still have a very good headroom there. Cash position, as we made -- actively made an investment, so the cash position decreased from JPY 4.7 trillion to JPY 3.4 trillion, but still JPY 3.4 trillion is very much good level of the cash position from our understanding. And of course, earnings announcement is to show you the end of the quarter, which is March end. However, our net asset value changes based on the share price.
So based on this morning's share price, we made our pro forma numbers here. On your far right, as of this morning, net asset value, JPY 27.4 trillion recovered from JPY 25.7 trillion. So about the same level as last year March end. Loan-to-value, also being improved. Cash position, we've been spending a little bit, so JPY 3.3 trillion. That is the latest pro forma numbers because we are the company, watching the balance sheet. So I also wanted to share this pro forma number with you. And these are the history of the net asset value.
Net asset value is the most important indicator for us to see a business. Our share price is coming from here, I believe. So of course, market changes varies every day. It goes ups and downs. And if it goes up, we are happy. If it goes down, it's unfortunate. However, it's not something that we should be -- being happy or not happy every day, but we should be -- it's not a quarterly basis. It's not an annual basis, but I believe we need to see 10 years, 20 years as an investment company to -- and whether are we showing the tendency to increase our value.
And from that sense, I believe this is the most important slide to share with you. Cash position, we have an ample financial resources, JPY 3.3 trillion. This covers 2-year debt redemption, which set it for our financial policy. Loan-to-value, 18%, as of the end of March, 20% pro forma basis. Our policy is to maintain the loan-to-value less than 25%. As of today, we still have a very good headroom here. There may be some fluctuation here. Sometimes, we kind of hit the gas for the investment activities, but sometimes market volatile so that it may hit 25% threshold.
But still, I believe that we do need to make sure or ensure that how we're going to bring it back. But at the same time, try to avoid such situation, we would like to manage our financials as much as possible. Now consolidated results. Net sales, JPY 7.2 billion, up by JPY 487 billion year-on-year, mostly driven by SoftBank KK. Gain on investment was JPY 3.7 billion or up by 460 -- sorry, JPY 4.2 billion. Income before income tax, JPY 1.7 billion. Net income, JPY 1.1 billion. So as you can see, our performance was pretty good last year.
Let me elaborate on gain on investment later. So if you could go over each topic, net income. In FY 2020, we recorded almost JPY 5 billion, but we have been suffering negative numbers since, but it's been improving. And in FY 2024, we saw the positive number for the first time in 4 years to JPY 1.1 billion. Correlation between gain or loss in investment and net income on a quarterly basis, but trend-wise, it's been going up. In the latest quarter, we posted a very strong result, which we are pleased with. And talking about gain or loss on investments, which are fluctuating every quarter, so I should elaborate on this. Sometimes we sold the assets earlier or with the prepaid forward contract like Alibaba.
We monetized based on the fixed share price. And then the share price went up. On an accounting basis, we can post a gain, but we also have to record a derivative loss. But from investment gain or loss perspective, we cannot net out. So if you can look at the colored bars, those are including Alibaba, for which we already sold shares due to prepaid forward contract. We posted JPY 1.5 billion gain on investment, but dotted line shows derivative loss. For example, Q2, JPY 1.5 billion; and Q4, JPY 1.2 billion; and Q3, JPY 686 billion derivative gain. In Q3, of JPY 3.7 billion gain/loss on investment, our real power is reflected in the colored bars.
All in all, this is the final result. Gain or loss in investment is reflected in income before income tax. So deducting a derivative loss, our actual capability is around -- able to yield around over JPY 1 trillion of income or gain on investment. Foreign exchange. Well, it was fluctuating in the last quarter. For example, as of March 31, it was JPY 151 per $1 last year. But as of March 31, 2025, JPY 149. But in span 1 year, it was a little impact on our results.
And I'd like to share some segment basis reports and starting from Vision Fund. This quarter, as a profit gain and actually, the Vision Fund 1 contribution was large. Vision Fund 2, due to the public securities impact was there. Maybe we can touch on a little bit more details later pages. And here is the breakdown of gain and loss. If you see the Vision Fund 1, dark blue, mainly ByteDance. And based on the valuation, this is coming from the market factors. So as a result, out of the $1.8 million numbers, majorities are coming from this market factor preliminary ByteDance.
And on your right-hand side, Vision Fund 2, the green one is a positive one, which is preliminary -- primarily OpenAI. So originally, we had a portion already. And in April, made the latest round and using that valuation as referring to recent transactions. But the public portfolios were a bit of drop, although it was a very good market. In India, however, some slowdown and also the drops in share price of those portfolio in India was one of the reasons for that. But hopefully, that we'll be able to see the good recovery from there. And here is the cumulative gain and loss on investments. There were some big drops in the past.
But now that we are coming very much back to the broader phase and there are still good pipelines for the Vision Fund, which is something that makes me excited. So that after this, hopefully, we'll be able to see better numbers going forward. I'm convinced that we'll be able to share a good news going forward. And here is the cumulative investment return. Vision Fund 1, $90 billion investments, performance, $113 billion, pretty good so far. On your right-hand side, Vision Fund 2, $60 billion investment. We are still return here at $37.9 billion. So we would like to show you the good return of the performance of the Vision Fund 2.
And here are the pipelines for the future growth. So from the left-hand side, we had made 55 listing of the portfolio companies since the inception of the Vision Fund. In fiscal 2024, 5 companies went public, a little bit smaller than the other years, but there were good IPOs. And also late-stage companies, which matured in the way, so that these total fair value of the late-stage portfolio is right now $36 billion. And these are the logos of the late-stage companies. Not only this, of course, there are others as well, but these are especially the highlights. For example, ByteDance, Klarna. Klarna actually was ready for the IPO, but has postponed.
Kavak, Fanatics, of course, OpenAI, those can be the good upside for the future after the IPO. Of course, I forgot the PayPay, not to forget PayPay, one below the OpenAI. Those are actually the good potential contributor for the uplift of the performance of the Vision Fund going forward. And the new investments in fiscal 2024, there are several. But for example, these are the companies that we made in fiscal 2024. You see the OpenAI logo many, many times. But at the same time, Helion, this is the next-generation fusion technology company. It may also -- can be the good driver to changing the world, Glean, Runway.
Those are great companies, too. So those companies that relates to AI and AI revolution and also the expected good upside is something that we, Vision Fund team are working on to explore so that we will be able to find those good numbers -- companies. And Arm is also a big in our portfolio. Arm posted a great result, steadily performing well. In FY 2024, they posted record high annual revenue, license and other revenue, royalty revenue. So again, it's been going well. Non-GAAP operating income grew steadily, posting 31% increase year-on-year, which is great. So what is the growth driver of royalty revenue?
They have some building blocks of their revenue, including royalty revenue. Compute Subsystems should support further growth of royalty revenue. CSS is IP packaged with Arm design. By adopting CSS, you can reduce the development time and cost. Royalty rate of CSS is higher than Armv9. In the past, CSS was adopted in data center, mobile markets and PC. Then they signed the first automotive CSS license agreement with a major EV car OEM. So as you can see, as CSS is going across diverse markets, we can expect more royalty revenue.
From the perspective of accelerating further penetration of Armv9, which also supports royalty revenue. Armv9 is the latest CPU architecture, which has been deployed in mobile PC, data center and automotive sectors. And for the first time, they announced Cortex-A320, which is the smallest Armv9-based CPU implementation for IoT and edge devices. Well, talking about Edge AI, which is going to be more and more important going forward. Not a cloud, but on the edge side, device side, more and more demands are there to process AI on device side. And Arm plays an important role. Why? Because Arm's solution has energy efficiency improvement by 50%.
So with limited power, edge needs to run. And focusing on edge devices is going to be very important. And Rene, Arm's CEO, said AI is everywhere. You cannot run AI without Arm. So Edge AI's penetration will be supporting Arm's further growth going forward. Arm's guidance was announced. For the first quarter FY 2025, revenue-wise from $1 billion to $1.1 billion, for example, or 6.5% to 17.1% compared to last year's quarter. Non-GAAP operating expenses, expected to $625 million.
We have not announced the full year guidance, only quarter guidance because things are so fluctuating and tax -- tariff issue could make a lot of changes going forward. So I made a decision not to disclose a guidance for the full year. And here is the OpenAI follow-on investments. This March, we had committed follow-on investments in OpenAI. Commitment is up to $40 billion, of which $10 billion is syndicated out to the third parties. So for SoftBank Group's point of view, it is up to $30 billion. There are some agreements in this $40 billion. One of the scenarios is that the $40 billion can be reduced down to $20 billion.
As you may know that Arm organization -- excuse me, the OpenAI's reorganization, whether it is going to be completed or not is one of the agenda. And without such completion this year, this $40 billion will be reduced down to $20 billion. Of course, we are expecting and hoping to be able to see the good completion of the reorganization. And based on that, we will be making our activities for the financial activities. In advantage of OpenAI, back in 2018, GPT-1 was launched and GPT-3 in 2020. So here, that the people start realizing the name of OpenAI, ChatGPT. Some people may say that what was this company? What's the service they are providing?
But after then, that they are making a steady evolution. And in addition to GPT, that they are also launching the inference enhanced model. And this relentless technological evolution has been made by OpenAI that made a big delta between them and the others. And that actually keep them very strong position in the industry. This March, our weekly active user actually reached to 500 million. I'd also like to share the comparison data with the competitors, but we don't have the most accurate numbers, but I believe the market share of the OpenAI can be around 80%. So they have a very big advantage in terms of the market share from my understanding. And the delta with the competitors is very large.
So this was also touched at the third quarter announcement. But once you have such a big difference, this is really difficult to exceed the frontrunner. So in this stage, because OpenAI has been developing their service and products in a very rapid pace, so that they have -- they will be able to maintain the strong positions in the industry. And now that I believe Open AI's service is becoming a de facto standard for the world users, and that is also making a great value for the company. And Stargate is a project that we announced. This project -- by developing this project, we will be able to provide a data center, huge data center. And for that, we will be having a collaboration from the chip makers, energy power producers, power generators. So with those collaboration that we will be able to provide the data center capacity to OpenAI so that OpenAI will be able to enhance the service and products so that the application layers or the users of such service will be able to even develop, afford for their services and products, and that will changing people's lifestyles.
So Stargate, by partnering with OpenAI, will be able to transform the society and the people's life. That's something that I am expecting from here. In the Stargate's program here, right now, there are more than hundreds proposals are being made, and we are having a due diligence for those sites. But still, not being able to announce first yet. I believe that one will be coming out from state of Texas. Maybe first, second and third will be coming from the state of Texas, but there are several going on parallelly so that we are not yet sure. I cannot really be specific which one will be the first, but I believe we are very close there. But there are some media reporting and so on and some media covering that the banks are hesitating to finance something like that.
However, that's not really true that actually, we are very much making progress and making good steps here. Overview of Cristal intelligence, which SoftBank and OpenAI signed a partnership agreement to develop enterprise AI agent. And SoftBank plays a key role in customizing for different customers and customized Cristal intelligence should be market across Japan. For that, we established -- we decided to establish a joint company, OpenAI Japan. Talking about Cristal intelligence, what would happen with Cristal intelligence? Miyakawa-san announced the financial results the other day, and he said that they were discussing with OpenAI and try to develop a best solution for a company to transform the business management overall, not only optimizing individual business areas, but also completely optimize the corporate as a whole. Phase 1 was individual optimization, which should not have a positive impact on the corporate-wide business management. So Cristal intelligence should help a company to completely transform and optimize the overall business management.
Again, from individual optimization to overall optimization, as illustration, if you can look at the left-hand side, with AI, you could implement different teams, different organization, but those individual organizations are not necessarily coordinated well. But with Cristal intelligence, by having AIs working together across different business units, this should help the company to completely transform the business management. Acquisition of Ampere, which was announced in March, totaled $6.5 billion. Quite a large number here. So it's been a while since that we announced a large amount of the investment in last, but closing is expected to be the second half of this year. And company overview here, they have about 1,000 engineers, AI cloud, AI-focused semiconductor designer company. And they actually design ARM-based server chip for cloud and AI specifically. And this Ampere, actually, I'm used to be the shareholder of this company as well.
So this is another thing that I wanted to highlight. And the reason or the rationale behind the acquisition here, there are 3 points. First, that we wanted to secure the highly skilled engineer, so they have about 1,000 very matured, well-trained engineers there. And this is also the company that are playing a very important role for the semiconductor design. And they have an expertise in taping out chips. So they have a lot of experience in several products that they've been working on, the taping out of the chips. And that rich experience is also important, which means I believe they have a very good project management capability. In addition to that, this company can also complement Arm's design strength because they have been designing Arm-based server chips for cloud and AI, so that's going to also enhance and complement the capacity and capability of the group overall.
So with that, we hope we will be able to strengthen the group's semiconductor business to realize ASI. And SoftBank Group's AI strategy, that is becoming clearer with those, I believe. Last year, in addition to Ampere, we also had an acquisition of Graphcore. So Arm being a center, we've been acquiring those businesses of Graphcore, Ampere so that we'll be able to enhance the AI compute. And with that, we would like to store the necessary computing power to the data center with Stargate. And then with the latest Edge AI model can be utilized for the AI applications, so that these companies is going to be enhanced the quality of AI and the quality of the company's business so that that's going to lead to the transformation of people's working style and the lifestyle. By having these 3 companies under the umbrella of SoftBank Group, our semiconductor engineers counts up to 8,400. As a Japanese company, having such a large number of engineers is very few.
Of course, Arm, Graphcore, Ampere, they are not a Japanese company. However, the SoftBank Group, as a Japanese company, they are our group companies. They are a family so that we believe this is a good number that we have as a capabilities for the engineers. Next, PayPay. We started preparing for IPO. PayPay is quite a young company, but they fully utilized a lot of resources in their company. And the business model of PayPay, I believe that Masa-san has a great contribution to building business model for PayPay. SoftBank, LINE, Yahoo!, they are working -- we are working with SoftBank and -- we are working with PayPay, sorry, through SoftBank, LINE, Yahoo!
and also investment made by SVF and Paytm provide technical support to launch PayPay system. So we really appreciate Paytm's great support at the beginning of the PayPay. So it's been busy last years. And before they knew it, they realized they have over 68 million in just 6.5 years since launch. PayPay is used by 1 in 2 people in Japan and 2 in 3 smartphone users. So PayPay has a very strong position in market share. And they have a pretty decent KPIs. So first, they get coverage.
And then go deeper. In other words, get the market as wide as possible, even though spending cost. And then once you got the great coverage, you should shoot for generating revenue and income. EBIT FY 2024 was JPY 45 billion and GMV, JPY 15.4 trillion or 23% increase year-on-year. So I believe that PayPay is fully ready for IPO. So as a company, they are ready, but is it enough? Not necessarily. Why?
Because market condition is very important. Again, market has been volatile in the last 12 months, whether this year or next year or in 3 years, we never know when is the best timing for PayPay to go public. So looking at the market conditions and PayPay's corporate maturity level, they should figure out the best timing for IPO. And they completely transformed themselves from just a payment application to digital transformation. They reorganized their structure to support card business, banking business and securities business. So they are now very decent financial platform and PayPay's value should be increasing further more. In financial strategy, basically, no change. That's the most important thing.
So however, we see the differences or the changes in the environment, we would like to ensure full readiness to promptly shift to a more defensive financial operation when necessary. Our financial policy unchanged, which is maintaining loan-to-value below 25% and also maintaining at least 2 year worth of the bond redemptions in cash. So Mr. Trump just celebrated the 100-day anniversary after the assumption of the President, but environment has changed dramatically. So in a high uncertain environment, but still, we would like to engage in financial activities with prudence and boldness to build a solid foundation for net asset value growth. And to make such a growth, we do need to think what is the best action that we should be making at the time. So as a company, for decision-making point-wise, our capital allocation is only 3
Unidentified Company Representative
Now we would like to take questions. First, we would like to take questions from the floor. [Operator Instructions] The first front row person, please.
Unidentified Analyst
Ono from Yomiuri newspaper. I have two questions. First is about Stargate. So thank you for sharing the progress of Stargate. But tariff situations by Mr. Trump, semiconductor requires for the data center maybe have a price change due to the tariff, and the environment has been changing. Is there any effect to the current preparation? Or how much impact do you see from such tariff policy?
And my second question is about OpenAI. Recently announced that they give up on restructuring to the profit organization. But OpenAI Global additional investment, has any impact from that change? That's my 2 questions.
Yoshimitsu Goto
So Stargate for your first question, that was announced in January. The tariff discussion has not been started back then. So compared to that time, there was actually the event after the announcement of the Stargate project. But still, things are changing every day. So at this moment, I don't want to be too specific. And we try to explore the best decision, best option at the time. But I don't think the tariff itself is going to stop the project's progress or something like that. We would like to wait and see a little bit.
But more than that, project itself is something that we would like to make sure to launch, and that negotiation is very important for us. For your second question about OpenAI. Recently, OpenAI updated their blog. And also the media has been covered, and there was some misunderstanding. See, like you said, that the media is saying giving up on becoming the profit organization. I don't think that's the correct understanding. The shareholder of the -- or the holding company is the nonprofit. And underneath the company which does the business, but more specifically, nothing has been changed at this moment.
They just show the direction of the structure. That's what's been announced. So at this moment, nothing has been really happened or changed, just to discuss the direction. And for us, I don't think that that's a wrong direction, a bad direction. That's something that we've been expected. And our investment is in the business vehicle, and this is -- hopefully that they'll be able to grow. Then that I believe that's a good thing for our investments.
Unidentified Analyst
Aoyagi from Nikkei. First question is about OpenAI. Investment amount, what would be investment amount? Would be half or $30 billion remain the same? And before such press coverage was there, what kind of conversation did OpenAI had with you?
Yoshimitsu Goto
So investment amount to OpenAI as an underwrite of $40 billion. As you can see in the chart in my presentation, Investment from SoftBank Group, I believe, is your question. Even though we underwrite $40 billion, but of them, $10 billion will be syndicated to third-party investors. So our principle is $30 billion as an investment amount. Probability-wise, what if there is no third-party investor, it could be $40 billion. But in fact, already some investment was made. So it's not going to be $40 billion in total because already some part was syndicated. And commitment will be from $40 billion to $20 billion.
Then our investment will be up to $20 billion according to a certain condition. So we assume a maximum investment amount to drive our financial strategy.
Unidentified Analyst
So at this moment, I believe that terms was included in the agreement that could reduce the amount down to $20 billion. At the moment, is that such event happening?
Yoshimitsu Goto
No. Event is not happening now. So if such event takes place by the end of the year, then reduce from $40 billion to $20 billion. We never know when such event takes place.
Unidentified Analyst
Then second question, again, about OpenAI. Your investment amount could be up to JYP 3 trillion maximum. Then are you going to be a major shareholder of OpenAI or a leading investor of OpenAI? Or you -- how do you want to position OpenAI after follow-on investment?
Yoshimitsu Goto
Well, our investment amount, you mentioned major shareholder or subsidiary, even though we invested $30 billion, still minority investment. It's not going to be our making OpenAI as a subsidiary. The first investment in April was done by Vision Fund 2. We have made investment in OpenAI last year several times. And we did investment several times since the beginning of FY 2020 -- sorry, calendar year 2025. Because small amount. Because of that, we wanted to utilize Vision Fund as a vehicle. But now we are talking about a big number.
So we want to figure out the best approach for us to make an investment in such a big amount in OpenAI.
Unidentified Company Representative
Any other questions, please? Then third row from the front.
Unidentified Analyst
MJ from Bloomberg, different subject. Recently, SoftBank has an investment in relation to crypto. That media coverage has been shared. Last time, you made the investment in FTX, and after making a loss from FTX, I believe that SoftBank was not paying too much attention to the crypto. But what is the background for setting up this venture company?
Yoshimitsu Goto
So we made the investment in the company called [Tesla]. Personally, I hate or I don't like crypto, but that's nothing to do with the business decision. But the crypto itself is becoming a certain level of the size as an asset to be managed. And there are many investors. And I believe this vehicle or the entity will be able to provide opportunities for the investors to invest or manage their assets. Of course, we are not investing in the Bitcoins or the crypto itself, but investing in such entity, which will provide -- made available for the access by the investors for the Tether and TA Group allocation. How do they're going to grow is one of the question. And of course, that we need to learn more about the crypto market.
So that's why that we come to this decision of investing in this company a little bit deeper than we used to have as a position of the crypto. But it's not that we are going to directly investing in or selling crypto itself.
Unidentified Analyst
And my second question is about OpenAI once again. So the Vision Fund has -- will be investing quite a big amount in OpenAI. That seems to leave little room for extra investments in other companies. So I'd like to ask the overall strategy for Vision Fund going forward in the new fiscal year.
Yoshimitsu Goto
Yes. For Vision Fund 2, we don't have any limitations of the size of the fund. So if it's necessary, if there is any necessary funds, we can upsize the Vision Fund 2. This time April, our OpenAI investment was a large amount, but that doesn't mean that we are not going to do any other investment at all. We will be looking into good pipelines explored by the great fund managers, investment managers in Vision Fund. And if there is any good companies, we would like to make investment in such.
Unidentified Company Representative
[Shiota] from TV Tokyo.
Unidentified Analyst
Sorry, again, a question about OpenAI. If investment amount was down from $40 billion to $20 billion, in a project, like a Stargate project, what kind of a difference would that make in the project that you are working on with OpenAI? Could you give us some color, please?
Yoshimitsu Goto
Yes. If amount down from $40 billion to $20 billion, well, $20 billion is still big enough, JPY 3 trillion. It's not going to change relationship between OpenAI and SoftBank Group. We are together running a big business project, and I believe that OpenAI is closest to us than any other companies to drive AI efforts, be it Cristal intelligence or Stargate. These are huge and very close relationship. So it doesn't matter whether our investment amount is $40 billion or $20 billion, or big or small.
Unidentified Analyst
Next question. Looking at SoftBank Group's history, you have been captured advantage of borderless information service or information in itself. And if going forward, information will be limited by national borders, what kind of impact or negative impact that you should anticipate?
Yoshimitsu Goto
What geopolitical risks are, I think, what you are talking about. You are right. Geopolitical risks could have an impact on services and businesses. And if U.S.-China tension continues and even becomes more serious, then investment activities in different areas may be not in sync anymore. But still, we have to continuously running a business no matter what would happen. We are in the west, if you will. And then we need to run the business in the context of network on the west side of the world. But still, we had a relationship with great business leaders in China.
There are still great entrepreneurs and business leaders in China. And to be very blunt with you, we like to work with them, but we need to focus on the immediate priority. I cannot answer your question easily, but we have to continuously make an effort to maximize our corporate value under the circumstances.
Unidentified Company Representative
The second row from the front.
Unidentified Analyst
[Kagashima] from Kyoto Tsushin. Relates to the previous question. So this fiscal year business forecast, performance forecast or the staged forecast-wise, what is the biggest risk you are expecting? So for the tariff, I believe that you said that it may not have a large impact on the Stargate project. But what is the biggest risk from your understanding at this moment?
Yoshimitsu Goto
As a SoftBank Group overall, from the tariff point of view, I don't believe not many portfolio company may negatively impacted from the tariff. I may need to address a little bit if there is any from the tariff point of view. When you look at the full year as an investment company and for the performance of investment activities, we have a large portfolio and growth in the big portfolio is one of the risk. For example, Arm is one of the biggest portfolio. So asset value of Arm may be negatively impacted from any reason that can be one of the risk for our investment performance. And also, if the business performance of the large investments can be another risk. For example, we are going to make a big investment in OpenAI. If there is any at all for the damage to the value of the business, that's going to be another risk for an investment company.
Jason, do you -- can you comment about the tariff impact to Arm business?
Jason Child
Yes. So regarding tariffs, as Goto-san said, it's a very, very dynamic situation. But as of right now, tariffs don't apply to design or design services, which is what Arm provides. It's only on the end product. There is some discussion that there may be tariffs on the actual chips, which could have impact. But of course, today, we provide designs for chips. We don't actually sell full chips. So I think it remains to be seen exactly how the tariff situation plays out.
I would say, as it relates to Stargate, there's a lot of partnership between, I know SoftBank and Arm and all the different parts of the portfolio with the U.S. government on that project. And so I would expect that whatever tariff policy is decided would probably not be detrimental to the overall project, but we'll see.
Yoshimitsu Goto
For Vision Fund, Navneet, do you have any comments about the tariff impact to the Vision Fund and Vision Fund activity itself?
Navneet Govil
Yes, sure. So in terms of tariffs, it really depends on 3 factors
Unidentified Company Representative
So we are going to take questions from online participants. [Operator Instructions] First, [Sato-san] from Nikkei Asia.
Unidentified Analyst
Can you hear my voice? The first question is about OpenAI. So whether an event stipulated in terms in agreement, is it going to take place or not? You will see, you said. But I wonder whether OpenAI explained to you where they would go.
Yoshimitsu Goto
Yes, talking about reorganization, of course, our conversation is based on assumption that reorganization will take place. There are different stakeholders, however, and some people may intervene in this project, and this may not go as smooth as we hope. But it's our -- out of our control. So we are just to wait and see what will happen, not really just on a negative term, but positive term.
Unidentified Analyst
Since the announcement of OpenAI in April -- sorry, May, you still remain close relationship with OpenAI?
Yoshimitsu Goto
Yes.
Unidentified Analyst
Second question is about Ampere, Graphcore and Sphere, you acquired 8,000 talents or engineers. So going forward, not only CPU, but the processors or AI semiconductors, you want to expand the area. That's why. So 8,000 semiconductor engineers, do you have all parts in place to expand the areas? Most of the engineers are Arm engineers. So not only CPU, but also you want to increase the number of engineers for processor in area.
Yoshimitsu Goto
So Jason-san, could you elaborate on that, your direction?
Jason Child
So in terms of the capabilities, certainly, within the SoftBank portfolio, Arm obviously provides significant capability across the design side for CPU, GPU, MPU technologies. And certainly, Ampere is a great partner, a company that we actually have had an investment in. And Ampere is unique. It's a team of ex-engineers that came from Intel. They had a lot of experience taping out world-class and developing world-class server and server chips previously on x86. They then brought that technology to Arm. So they actually taped out at least 5 different chips, server chips on Arm. So that was certainly because of the partnership that Arm has had with them, that was a great acquisition that we have a lot of synergies with.
In terms of Graphcore, they are a company that has a history of building a GPU or NPU accelerator products. And they have taped out a number of products over the years, and have also had a lot of success in that area. That is an area that Arm has not worked in, in the past. And so I would say there's very much a high synergy or complementary aspect across all 3 companies. In terms of capabilities to address the opportunities for Stargate, there definitely is from a CPU and possibly beyond, but no products have been announced thus far, but certainly, lots of capabilities have been created.
Unidentified Analyst
So just to make sure I understood correctly the translation. So the number of current semiconductor engineers are enough to have a capability for semiconductor -- sorry, AI semiconductor in the future. Is my understanding correct?
Jason Child
To actually completely get to a full tape-out and development of a chip, there typically is a large design capability. I would say we have most of the capability across certainly those 3 companies. In terms of being able to, typically to get to the more complex chips, it requires working with others, typically ASIC or application-specific integrated circuit providers. And so I would say the combination of the technology in-house as well as some of the different partners that Arm, I think Graphcore, I know Ampere all work with, I would say the capability is largely either in-house or under contract.
Unidentified Company Representative
Next question, Mr. Masuno from Nomura Securities.
Daisaku Masuno
This is Masuno speaking. I have 2 questions. One is about Robo Holdings. Looking at the robot has been focused very much, then there are several robot activities. And at this time, SBG, 10 out of SoftBank Group and 6 from the Vision Fund to set up the Robo Holdings and mainly SoftBank Group is going to be the shareholder, which is a good structure and very interesting as well. So I am excited to see the rapid movement here. And for the robotics, I believe that mainly held by -- and what is the background? Why that the holding company is becoming the main player for this robotics and robotics investments?
Yoshimitsu Goto
Thank you for your question. Robo Holdings is a very important challenge for us. As for robotics, actually, that we've been actually addressing the robotics for the past 10 years or so. And there are several portfolio companies, which has the robotics expertise. Along with the AI development, robotics is going to be developed at the same pace, I believe, and the services in the market, including people's working styles and lifestyles is going to be changed. That's very visible and especially robotics is very visible from that sense. So in -- many preparation has been done. Things has not been fully discussed here, but hopefully, that you can be looking forward to.
And Masa and ourselves is going to be directly involved in these robotics activities.
Daisaku Masuno
Personally, I believe it can be the same size of the business as Vision Fund. So I'm very much expecting on that. And my second question is about the investment -- the objective of investing in OpenAI. So my understanding is that you would like to long hold the OpenAI by SBG for the future strategy and future expectations. But making a loan to Vision Fund from SBG and the Vision Fund, not only that, but also having the Masa's individual guarantee, that was very surprising to me. I thought that it should be done by the SBG itself. But is it because to make the better performance for Vision Fund, for making the Vision Fund as an investor for the OpenAI?
Yoshimitsu Goto
Thank you for your question. This is something that we have an internal discussion very seriously, and we have decided to make the Vision Fund as an investor. The logic is because we've been -- Vision Fund has been the investor for OpenAI for the last phase, and that's under starting as this is the minority investment. And also, many investors were participating in this financial round. So -- and at the same time, they have a clear road map to the monetization. So that is why that we have decided to use Vision Fund. But the loans, Masa's part, that we would like to maintain the framework of Vision Fund 2 as much as possible. But at the same time, because the amount is large, so therefore, we would like to utilize intercompany loan instead of preferred share so that we'll be able to get the return back faster.
But still, there is a remainder for the investment amount, which is also not small. So that we would like to have a discussion internally so that we can decide. And I think it's too stretching to depending on Masa's personal guarantee. We are not depending on that. But because of the structure from Vision Fund 2, we maintain the same structure for Vision Fund 2 to make this investment. That is why the approach becomes this way.
Unidentified Company Representative
So we'd like to conclude the Q&A. Thank you very much. The SoftBank Group Corp. earnings results announcement for the fiscal year ended March 31, 2025, is now closed. The video footage of this meeting will be distributed on demand from our corporate website. Thank you very much once again for joining SoftBank Group Corp. earnings results announcement for the fiscal year ended March 31, 2025.