SoftBank's AI investment spree to be in focus on at Q1 earnings
Analysts and investors are keen for updates on how they will be financed, the timeline for returns to materialise and whether assets will be sold to fund the new projects.
SoftBank has embarked on its biggest spending spree since the launch of its Vision Funds in 2017 and 2019.
It is leading a $40 billion funding round for ChatGPT maker OpenAI. SoftBank has until the end of the year to fund its $22.5 billion portion, although the remainder has been subscribed, according to a source familiar with the matter.
It is also leading the financing for the Stargate project - a $500 billion scheme to develop data centres in the United States, part of its effort to position itself as the "organiser of the industry," founder Masayoshi Son said in June.
SoftBank has yet to release details on what kinds of returns its financing of the Stargate project could generate. The extent of third-party investment will determine what other financing tools, such as bank loans and debt issuance, it may have to deploy.
In July, SoftBank raised $4.8 billion by selling off a portion of its holding in T-Mobile.
"If other sources of capital are less supportive, SoftBank could look to asset-backed finance, which is collateralised by equity in other holdings," Macquarie analyst Paul Golding said.
The Japanese conglomerate is expected to post a net profit of 127.6 billion yen ($865 million) in the April-June quarter, according to the average estimate of three analysts polled by LSEG.
That would mark SoftBank's second consecutive quarter of profit and follow its first annual profit in four years when it was helped by a strong performance by its telecom holdings and higher valuations for its later-stage startups.
Its results are, however, typically very volatile and difficult to estimate due to manifold investments, many of which are not listed.
SoftBank's performance in exiting from investments and distributing profits has been patchy of late. The Vision Funds had made a cumulative investment loss of $475 million as of end-March.
That said, 13 of 18 analysts have a "buy" or "strong buy" rating for SoftBank's stock, according to LSEG.
Although there is some concern in the market that AI-related valuations have become bubbly, they continue to climb.
OpenAI is in early-stage discussions about a stock sale that would allow employees to cash out and could value the company at about $500 billion, according to the source - a huge jump from its current valuation of $300 billion.
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SINGAPORE: In a recent CNA interview, Dennis Lim, owner of The Emerald Bakery, reflects on his life's work. The 55-year-old baker endures "pain in every joint" throughout 15- or 16-hour shifts. Though he says baking is about perseverance and endurance, he is clearly passionate about his craft. We see it in his hands, deformed by severe arthritis yet still shaping each loaf of bread. We hear it in his cheery optimism – despite losing mobility in two fingers on one hand, he quips that he can still use the other three. His grit is undeniably moving, yet a quiet brutality underpins the clip. An employee describes how Mr Lim pushes through arthritis flare-ups; his wife recalls managing pregnancy alone while he was consumed by work. It raises a difficult question: Have we normalised – and even glorified – extreme sacrifice in Singapore's food and beverage (F&B) industry? And at what cost? THE CULT OF OVERWORK There's no doubt that resilience is essential in a professional kitchen. 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HOW CONSUMER EXPECTATIONS FUEL OVERWORK F&B workers generally operate under immense pressure, but this is especially acute in Singapore, with sky-high rents and fierce competition. Consumers can also be complicit by expecting convenience, lightning-fast service, and rock-bottom prices – often without understanding what it takes to meet those expectations. These expectations force owners and workers to work longer hours with fewer resources just to keep up, perpetuating a cycle of overwork. Ms Lee said, 'Admittedly, it's difficult because there are almost no margins in F&B … Rent and food costs are at an all-time high and these overheads would seem to F&B owners to be fixed costs. So one variable cost that owners would consider cutting would be labour cost, which puts employees at a disadvantage.' While not all consumers can afford to pay more, the broader culture of undervaluing labour and having impossibly high standards remains a significant problem. LONG-TERM IMPLICATIONS AND A WAY FORWARD Romanticising overwork echoes the Japanese shokunin ethos – the craftsman who might spend a year sweeping the floor before being allowed to touch the rice. There is beauty in such devotion. For previous generations, long hours, perseverance and sacrifice were prized as signs of loyalty and character. But today, this mindset risks driving away new talent in Singapore's F&B scene, as many young workers refuse to burn out early. Gen Z, especially, with its stronger emphasis on mental health and work-life balance, is increasingly unwilling to accept the grind mentality endemic in F&B. Recent reports show a trend of Gen Z workers avoiding F&B roles – a warning that the old virtue of 'chi ku', or 'swallowing bitterness', is losing its grip. Without reform, the industry faces a growing talent shortage as this generation rejects sacrificing well-being for their careers. As a counter to overwork culture, some businesses are showing that change is possible. Take Candlenut, run by my former boss, Malcolm Lee. When he opened the restaurant in 2010, he endured long hours, sometimes even sleeping on-site just to keep things running. By 2016, the restaurant broke even and earned a Michelin star, but the success came at a steep personal cost, including the strain on his personal relationships. Troubled by the emotional toll, Mr Lee restructured operations: Candlenut now offers a four-day workweek and guarantees staff a daily, uninterrupted meal break. His mindset shift reflects an emerging industry trend: Mental health matters, and productivity should not come at the expense of well-being. At Wheathead, Ms Lee protects her employees from unfair expectations, emphasising that the bakery is a 'second home' for her team. On Wheathead's Instagram account, she wrote, 'We will not stand for rude or entitled behavior when anyone steps into our space.' 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