Big tech is expanding in Taiwan, but may not aid Taipei in a crisis
Sam Bresnick is a research fellow and an Andrew W. Marshall fellow at Georgetown University's Center for Security and Emerging Technology (CSET).
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Japan Times
15 minutes ago
- Japan Times
SoftBank swings to profit after Masayoshi Son's AI bets pay off
SoftBank Group swung to a quarterly profit, riding on gains from its bets on Nvidia and startups in a boon for founder Masayoshi Son's bets on artificial intelligence technologies. A recovery at SoftBank's signature Vision Fund and the sale of assets such as its T-Mobile U.S. holdings are helping Son double down on bets geared to help him capitalize on booming investment in AI hardware. SoftBank, which had sold $4.8 billion worth of its stake in the U.S. telecom company in June, on Thursday revealed the sale of another $3 billion of the U.S. carrier's stock. The Tokyo-based company reported net income of ¥421.82 billion ($2.9 billion) in its fiscal first quarter, more than double the average of analyst estimates. The Vision Fund logged a ¥451.39 billion profit, helped by a recovery in tech valuations and gains on holdings such as Coupang, Auto1 Group SE, Symbotic and Swiggy. SoftBank's earnings got an additional boost from paper gains on its recent purchases of stock in Nvidia and Taiwan Semiconductor Manufacturing Co. The Japanese company increased its stake in Nvidia to more than $3 billion as of end-March, helping the Japanese investor benefit from the AI accelerator maker's 46% rally during the three months through June. The 67-year-old SoftBank founder seeks to play a more central role in the spread of AI. Central to that push is its chip design unit Arm Holdings and a $500 billion Stargate data center foray in the U.S. with OpenAI, Oracle and Abu Dhabi's tech investment fund MGX. That Stargate push has been somewhat delayed, Chief Financial Officer Yoshimitsu Goto said, conceding for the first time that the $500 billion artificial intelligence tie-up with OpenAI was behind schedule. SoftBank will soon begin concrete talks on its first Stargate project, he said. The Tokyo-based investor was not involved in OpenAI's data center plans in Norway, while OpenAI was leading the rollouts in the United Arab Emirates and Abilene, Texas, he said. Some of the conversations behind Stargate have slowed due to market volatility, uncertainty around U.S. trade policy and questions around the financial valuations of AI hardware, it was reported in May. "Things are taking more time than initially expected, but we'd like to speed things up from here,' Goto said during an earnings conference. "We are now focusing all our operations on AI and are working to expand on multiple fronts.' As part of its multipronged push into AI, SoftBank is slated to invest as much as $30 billion in OpenAI, and it's inked a $6.5 billion deal to buy chip designer Ampere Computing Holdings. Son is also courting TSMC and others about taking part in a $1 trillion AI manufacturing hub in Arizona. SoftBank's shares closed at a fresh record high ahead of the earnings release. U.S. President Donald Trump's threat to unleash 100% chip tariffs but exempt companies moving production to America is infusing optimism for the Stargate project. "Our longer-term outlook for SoftBank Group is cautiously optimistic, with a consensus toward continued business expansion,' said Ashwin Binwani, founder of Alpha Binwani Capital. But concern over whether SoftBank can manage multiple mass-scale funding needs as interest rates inch up is keeping its stock at a significant discount to the total net asset value of its holdings. The company has been selling off assets ahead of such mega-projects and deals as the fair value of the Vision Fund portfolio rose $4.8 billion from the prior quarter. All told, the two Vision Funds sold off assets worth a total of $3.35 billion, including full exits from nine companies. To be sure, SoftBank's total OpenAI investment may be reduced if OpenAI does not restructure into a for-profit entity by the end of the year. And the Ampere deal remains subject to approval by U.S. antitrust regulators and the Committee on Foreign Investment in the U.S., it said. That acquisition is facing a potentially lengthy probe, it was reported. "Key points to consider in assessing SoftBank include whether investment in the Stargate Project involving AI infrastructure in the U.S. will progress; whether additional investment in OpenAI amid a fluid management situation is tenable,' SMBC Nikko Securities analyst Satoru Kikuchi wrote in a note earlier this year.
The Diplomat
17 minutes ago
- The Diplomat
Thailand's Cabinet Approves Changes to Troubled Chinese Submarine Deal
The Chinese submarine will now be fitted with a Chinese-made diesel engine, in lieu of the German engines included in the original deal. After a long delay, Thailand has finally agreed to accept the installation of a substitute engine in its Chinese-made submarine rather than a German one, ending a long delay over the troubled project. In a decision on Tuesday, the country's cabinet approved changes to the submarine contract, agreeing to the substitution of the previously planned MTU396 German diesel engines with the Chinese-made CHD620 propulsion system. It also extended the construction timeline by 1,217 days. In 2017, Thailand's cabinet approved the purchase of a Yuan-class S26T submarine for 13.5 billion baht ($417 million), with delivery expected in 2023. But the purchase ran into trouble when the Chinese state-owned submarine developer was unable to acquire a German MTU396 diesel engine for the boat, due to a European Union arms embargo on Beijing. Several rounds of negotiations ensued, in which the Chinese side sought to convince the Royal Thai Navy (RTN) to accept a Chinese-made prototype CHD620 propulsion system, which it said would be functionally equivalent to the cutting-edge MTU396 engines manufactured by Germany's Motor and Turbine Union company. In 2021, construction on the submarine came to a halt, and the boat is currently around two-thirds finished. Throughout the negotiations, the Thai government mooted a number of alternative options, including canceling the submarine contract and a proposal to purchase a Chinese-built frigate in place of the troubled submarine. It now appears to have accepted the fact that the German-made engine is not feasible, and that pulling out of the project could create unnecessary frictions between Bangkok and Beijing. It is unclear whether the amended agreement involves any compensation from the Chinese side. In a statement yesterday, the RTN expressed its 'gratitude' to the Cabinet for approving the amendment to the agreement. 'This allows the Royal Thai Navy to proceed with the submarine procurement project, enhancing its comprehensive naval capabilities across the surface, above, and below water dimensions,' it stated, adding the submarine 'will further enhance the country's security and maritime interests.' It said that the Chinese engines 'have been tested and proven to have performance and safety comparable to or better than previous models.' Also on Tuesday, the Thai cabinet approved the acquisition of four Gripen JAS 39 fighter jets worth 19.5 billion baht (around $602.5 million) from Sweden's Saab AB. The Royal Thai Air Force (RTAF) announced plans in June to purchase a total of 12 jets over a 10-year period, as a replacement for its ageing fleet of U.S.-made F-16s and older Gripen JAS fighters. 'The Cabinet has approved the purchase of JAS 39 Saab Gripen to strengthen the Royal Thai Air Force and protect Thailand's sovereignty,' the RTAF said on its official Facebook page. Several of the RTAF's F-16s were used to target Cambodian military installations during the two countries' recent border conflict, which killed at least 40 people and displaced upward of 300,000. The Cambodian press reported that the Thai bombing actions had led the Swedish government to cancel the upcoming Gripen purchase, although the Swedish embassy in Bangkok later denied the report. A signing ceremony for the Gripen deal is scheduled to take place in Sweden on August 25.
The Mainichi
20 minutes ago
- The Mainichi
SoftBank Group returns to profitability in April-June, 1st in 4 yrs
TOKYO (Kyodo) -- SoftBank Group Corp. said Thursday it posted a net profit of 421.82 billion yen ($2.87 billion) in the three months ended June, returning to profitability for the first time in four years for the fiscal first quarter. The net profit was a sharp turnaround from a net loss of 174.28 billion yen in the same quarter a year earlier, as investment gains in its flagship Vision Funds soared to 660.18 billion yen in the April-June quarter from 32.39 billion yen a year earlier. Revenue for the April-June was up 7.0 percent at 1.82 trillion yen. The company did not release its earnings forecast for the year through March 2026, citing uncertainties.
