Full Transcript: SoftBank Group Q1 2026 Earnings Call

On Thursday, SoftBank Group (OTC:SFTBY) discussed first-quarter financial results during its earnings call. The full transcript is provided below.

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The full earnings call is available at https://group.softbank/en/event/earnings_2026q1

Summary

SoftBank Group Corp. reported a record high net asset value of 72.3 trillion yen at the end of June 2023, though it later declined to 58.3 trillion yen, still considered strong.

The company achieved a 1.8 trillion yen investment gain for the first quarter, with significant contributions from Intel and ByteDance, leading to a net income of 347 billion yen.

SoftBank continues to focus on becoming a leading AI platform provider, with strategic investments in AI infrastructure and a notable investment of 20 billion yen in OpenAI during the quarter.

The company announced plans to develop a 5 gigawatt AI data center in France, highlighting its commitment to expanding AI infrastructure.

ARM, a key asset for SoftBank, recorded its highest revenue at 1.3 billion for the quarter, with growth driven by demand for ARM-based CPU cores in data centers.

SoftBank's Vision Fund saw a cumulative investment return of 114 billion, with gains primarily from ByteDance, despite some negative impacts from PayPay's share price.

The company is involved in large-scale data center projects in the United States and France, emphasizing the strategic importance of AI data centers.

SoftBank maintains a financial policy of keeping loan-to-value below 25% and ensuring a cash position covering at least two years of bond redemptions.

OpenAI's valuation remains stable, with SoftBank viewing its investment as a strategic partnership rather than purely financial.

CEO Masayoshi Son expressed a long-term vision for SoftBank's growth, aiming to achieve a net asset value of one thousand trillion yen over the next 15 years.

Full Transcript

OPERATOR

Thank you very much for waiting, everyone. Now we would like to start the SoftBank Group Corp. earnings results announcement for the first quarter of the fiscal year ending March 2027. 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, Senior Vice President and CAO; Makagni, Executive Managing Partner, SB Investment Advisers and SB Global Advisers; and Jason Child, Executive Vice President and CFO. Today's announcement is live broadcast over the Internet. Now I would like to invite Yoshimitsu Goto to present the earnings results and business overview.

Yoshimitsu Goto, Board Director and CFO

Good afternoon, everyone. Thank you very much for your time today. I am Yoshimitsu Goto, CFO, SoftBank Group. First of all, I would like to express my deepest condolences to those who lost their lives in the recent Kumamoto earthquake. I also extend my heartfelt sympathies to everyone affected by the disaster, including those staying in evacuation shelters or living away from their homes under difficult and uncertain circumstances. As SoftBank Group, we would like to support as much as possible, so SoftBank Group, SoftBank Corp., and LY Corporation, Fukuoka SoftBank Hawks will donate, and also encourage public contributions.

We will continue to support the recovery and the reconstruction efforts through the services provided by our group to help those affected regions regain their daily lives as quickly as possible. Now, I would like to go into our earnings results. Towards June compared to March close, the market has been dynamically moving. As you know, SoftBank Group is an investment company. We can be affected by the market, and investment portfolio valued by the market is basically reflected in our results.

As a result, at the end of June, our net asset value, which is the total value of our investment portfolio less debt — this interest-bearing debt gives you a net asset value — was 72.3 trillion yen. This is a record high number. Our performance is actually described by this value. I believe that this is the most important indicator to see and value our enterprise value. This is still a rough estimate, but on a pro forma basis with the latest information, net asset value is about 58.3 trillion yen.

So it is a fact that it has declined from 72.3, but actually, if you see the trend in the past, 58 is already a great number to be achieved. So I would like to also show this together with our history. This is the kind of record that we've been experiencing, and also this itself actually shows you how much potential we have for further growth in the future. As I mentioned, every quarter there are good times and bad times. But at the same time, we do not become too happy or too sad about short-term fluctuation.

We always look at the mid- to long-term period and how we are building the base for further growth and how that is going to be reflected in future growth. Our investment strategy is pretty much equal to our business strategy. As an AI platform provider, what do we need to do? We always think backwards once we set the target, and then we discuss what we need to do. Why are we addressing AI infrastructure? Because if you don't address AI infrastructure, you cannot see the enhancement or acceleration of the speed of AI models.

OpenAI and other hyperscalers — those AI model players — we would like to accelerate the speed of those people or those companies. By addressing AI infrastructure, that can also accelerate the growth of Arm, for example. Arm, as you know, designs the core and heart of the chip, and they have dominant market share for that. By having more and more chips shipped, then their basic business model will grow. And not only that, recently they have announced to also address their in-house chip, with a high-quality, high-capability chip to be used in many AI models and AI infrastructure.

Because we've been telling the market that we try to become a company to change people's lifestyle — lifestyles or working styles to be changed — physical AI is going to be a very focused area that we pay very good attention to. This area is actually just the beginning, and there are not many companies making profit, and we don't really know who will be the winner for the future in this area either. So that makes us even more excited to see, and each has a kind of correlation to each other.

That is why we address these four. So only for the quarter, we do have some developments here which I will be explaining in later pages. To become a real number one AI platform provider is something that we are trying to achieve, and that's something that MASA is very much putting his effort into. This is the financial highlights for the first quarter. First, 1.8 trillion yen investment gain — this increased by 1.3 trillion year over year — and the net income, 347 billion yen.

Second, as I mentioned in the previous page, net asset value 72.3 trillion yen, highest ever compared to the past numbers. And third, for our own investment in OpenAI, we invested 20 billion in this first quarter. Towards October we have a remainder of 10 billion which is committed. And fourth, for the first quarter period, we have announced plans to develop a 5 gigawatt AI data center in France, which was a highlight for our quarter. Now we would like to go into consolidated results.

You see the numbers in each respective line, but the investment gain actually increased dramatically compared to the previous fiscal year, and net income is another important number — 347 billion yen. So I will explain to you the trend from the past, but something is missing from here, which is the net asset value. I would like to also add once again that the net asset value is also an important KPI for our company — investment gain or loss and the net income — how it has been developed.

For April to June, first quarter, 1.8 trillion yen. This was mainly due to, actually, Intel. Last year, we've been paying attention to the semiconductor business in the United States, and we invested in Intel. As a result, in the first quarter, it has been making quite a good increase. Also, ByteDance invested by Vision Fund — the fair value increased — was another contributor to the investment gains for the quarter. One more important indicator from the financial point of view is, as I mentioned, net asset value once again — end of June, 72.3 trillion yen.

Compared to a quarter before, that has increased dramatically. And also the indicator to measure our safeness — this is the net debt over equity value of holdings — at the end of June, 13%, which is also a very safe level, or even too safe. So we may need to invest more — probably that's how we believe — tightening the loan to value. And cash position, 3.5 trillion back at the end of March, has decreased a little bit to 2.3. But this is due to the redemptions for the maturity of the bonds and also some investment activities.

Still, it does maintain the necessary cash position based on the financial policy we have. Net asset value on a quarterly basis, as you can see, highest ever — 72.3 trillion yen. Loan to value: if you look at the trend from the past, as a financial policy we have 25% as a threshold. At the same time, I would also like to emphasize 25% itself is already safe enough, but we make it even safer for our business itself because our company has quite a large investment from our own balance sheet, which is quite rare and unique compared to other global investment companies.

So I believe this is important for us to share with you — the safety of our business using loan to value. And why 25%, you may ask. It's because we do need to see some kind of threshold — where do we think the safety level is. Of course, financial people may understand well about the loan to value — how much will be the safe level — but for the public to understand, even if the market can be volatile, as long as we keep this level, we will be able to keep the company at a safe level.

Cash position — a little bit of decrease I mentioned earlier — but in our financial policy our criterion is maintaining a cash position above two years' worth of bond redemption, and over two years we expect 1.5 trillion yen for bond redemption, so our cash position covers more than enough. Now let me talk about ARM, one of the most important companies to US revenue. In the first quarter they hit the highest record, posting 1.3 billion. It increased 22% year on year. Amazing result. Fully diluted earnings per share hit a record high in the first quarter; it increased 29% year on year, against great performance guidance. For revenue they have a range, but the midpoint is 1.38 billion for the second quarter. Guidance for EPS is 47 cents at the midpoint compared to analyst consensus as of ARM's earnings announcement.

Both are higher. So I think that's really convincing and something that you agree on. Looking at ARM's performance, ARM-based CPU cores for data centers are growing. As you know, it's been growing since 2019. Many hyperscalers have adopted ARM-based CPU—Cobalt and others—and Google especially grew significantly in the last 12 months, which should have a positive impact on ARM's future going forward. Again, many tech companies have adopted ARM's products.

ARM IP-based CPU chips have been used by about 50% of leading hyperscalers, like you can see on the slide—like Graviton, Axion, Cobalt, and Grace. They help us to raise ARM's brand value and recognition. As you know, ARM has provided chip designs since the beginning, but also ARM has announced that they would develop their own product by themselves, which is a huge jump from ARM's perspective. In fact, this CPU, compared to x86, per 1 gigawatt of data center capacity, helped save up to 10 billion CapEx.

Very efficient CPU, and as agentic AI is deployed further, the market of CPUs for data centers should grow significantly, and ARM's AGI CPU attracts more demand than what we had expected and what ARM had expected, which is all positive. And we have two more companies joining as launch partners of ARM AGI CPU: Oracle and Varda, which is great. From a PC perspective, in fact agentic AI goes into not only cloud but also a variety of devices. And NVIDIA announced a chip for PCs with agentic functionality, and this has an ARM-based Grace CPU and NPU.

And by the way, if you have any questions about ARM, you can ask Jason later. Now OpenAI. As we mentioned in the last earnings result announcement, we made a commitment in March, and that commitment was to invest 30 billion this year, and of them 20 billion were executed, and the remaining 10 billion investment will bring total investment to 64.6 billion and ownership to 13%. OpenAI's GPT is a base to offer a variety of products for consumers. As you are familiar with, ChatGPT is there, and for business users, especially for software engineers, Codex is offered, which we focus on, and they focus on selling Codex.

On top of that, ChatGPT Work was released recently. So the AI model evolves, and product performance goes up accordingly. In 2022, GPT-3.5 was released as what we know as ChatGPT, and GPT has been adding more and more functionality and capabilities, more than you imagine. GPT-4 has an AI capability that solves problems, not just answers questions. It was released in March 2023, three years ago, and GPT-5 has agentic AI capability. So it is AI that performs tasks.

So compared to 3.5 to 4 it is a significant evolution. And the latest one, GPT-5.6, agentic functionality is even enhanced. So it is an AI that gets work done. So AI does work autonomously, which is unique. Talking about GPT-5.6, which is the latest revision—from an expert perspective, how the 5.6 is viewed—there was an evaluation methodology developed by UC Berkeley and others. According to their evaluation, OpenAI yielded the highest performance in terms of a score.

And if you take a look at the right-hand side, compared to other AI, OpenAI 5.6 cost far less. So a high-performing model with lower cost is how GPT-5.6 is seen by professionals. I'm not an engineer at all, I am a finance guy, so I cannot answer any professional or expert questions. But this is as much as I can tell you. Generally, Codex for software engineers has been growing significantly. In December—excuse me—weekly active users were 0.4 million, and in July 10 million; it grew 24 times in just seven months. On top of Codex, ChatGPT Work was released for business persons. So combined, Codex and ChatGPT Work again, weekly active users grew 25 times in seven months. So OpenAI is kind of a latecomer in terms of the enterprise market because they started off with the retail users, retail market. But OpenAI has advantage in terms of their brand recognition among the consumer market. So going forward, the enterprise market is a key focus so that they can grow more in the enterprise market.

Now let me talk about PARSE, or patching as a service. In July, last month actually, SBOAI Japan, our joint venture between SoftBank and OpenAI, announced and launched PARSE as a cybersecurity solution. We are a holding company, and we are a strategic investment holding company. So from our perspective, our job is to make sure that our portfolio companies work together so that we can help them to raise their corporate value. We want to help them to do that.

So again, this PARSE launch by our portfolio companies is a great example. This PARSE will be rolled out to 3,000 companies in Japan. So they start from vulnerability assessment, and once vulnerabilities are identified, they run the program to apply patches from end to end. They offer this PARSE service to those critical infrastructure companies in Japan—3,000, that is. And later, we want to even offer code modernization. Now let me go into AI infrastructure. AI data center portfolio we are mainly leading right now is in the United States, and also we have a project in France as well, which is announced this quarter for United States, Ohio and Texas state, and in France. All the France, which is northern France area, is actually the place we are addressing our project in France. We announced a plan to develop 5 gigawatt AI data center in France. So in June 2026 there was a Choose France summit, and there, in front of President Macron, we have announced a plan for the development of 5 gigawatt for the first phase, 45 billion euro investment, to deliver 3.1 gigawatt of AI data center capacity in northern France by 2031. More specifically, Dunkirk, Bushan, Bosco — those are the first sites that we will be addressing. First gigawatt Bosco AI data center is actually designated as a fast-track project by French government. So with that we have secured one gigawatt of power, and also accelerated grid connection is actually addressed. In United States, if we try to address the data center project or if we try to do in Japan, because data center concerns a huge volume of power, you also need to build power generation plant at the same time, which means you need double the size of capex.

But in France, compared to the rest of the world, they have a very unique advantage, which is that they are actually the exporting country of the power, so that they can provide the power to the data center use without causing any impact to the French citizens, but still they'll be able to allocate some power to the data center. Meaning addressing data center project approach is different compared to the other world, and they do have a kind of a good base to proceed the data center project from that reason.

And also in France we've been building supply chain for AI data center equipment, and establishing a local supply chain for power modules in Dunkirk to accelerate data center development together with Schneider. So SoftBank Group and Schneider are going to set the supply chain for the power module, and we will be able to accelerate data center development in United States. A PORTS Technology Campus, Pike County, Ohio, which we announced, the 10 gigawatt large scale data center project — this is quite a huge project.

We are currently in discussion towards execution of this agreement, and we are coming to the final stage of such discussion, and at the same time we are expecting construction starting in 2021. Another project that we've been working on in United States, we are in Milam County, Texas AI data center, and already have this agreement placed with OpenAI, and Building One construction on track for the delivery. To proceed our data center project we have a group company which plays a very important role, which is called SB Energy, actually established back in 2019.

Originally they've been addressing many power projects in the United States, and they've been expanding their business domain to data center because power and the data center developed integrated way is going to be the benefit and advantage, and we have a very experienced management to lead the business of SB Energy. So cumulative project capital raised, which is almost a total number of project amount by SB Energy, is about $19 billion, and power generation and the storage capacity under operations or under construction is about 5 gigawatt, so they do have quite the size of the business and the presence in the States.

In May this year they have already filed the confidential filing for the Form S-1, and we are very much looking forward to see their further development in the future. And NEO cloud service, which was also presented at SoftBank Corp.'s earnings results announcement a few days ago. So our domestic mobile operator and SoftBank Group holding company, together with them, we are start launching the project for the new cloud service in the United States.

So this NEO cloud business will be providing AI compute via the cloud, so IT, power, data. AI data centers which will be provided by SB Energy is bringing into the special purpose company, and the service will be provided as a cloud service to the off-takers. We believe this is going to be also another important business model for the future. Now into Vision Fund investment gain or loss. This is since the inception of the business. It's going well and actually adding some more investment gain as of the end of June: 47 billion.

And this is a breakdown of the gain or loss on investments for the first quarter period. Vision Fund 1 on your left-hand side, mainly due to the increase in the fair value of ByteDance, led to Vision Fund increase of the gain on investments by 2.3 billion, and on your right-hand side, Vision Fund 2 and LatAm and others a little bit about negative. This is because of the PayPay, which went public this spring, and the share price of PayPay a little bit weak this quarter.

Actually that was the main reason, but since then PayPay is actually recovering its share price, and for the future we are still very excited about this business too. Cumulative investment return. Including the exited companies, we showing the total of the investment return, and on your left, Vision Fund 1: 114 billion cumulative investment return, so exceeding largely compared to cumulative investment cost. So green portion is the exit case. So actually we have already exited $73 billion.

Also the investment monetization. So those green bars that we have just mentioned in the previous page, in every quarter, especially in the recent quarters, about 1.5 billion in average has been monetized and made its return in the past two years. Main divestments were on your right-hand side: Coupang, Robinhood, Full Truck Alliance, DoorDash, and so on. So those actually went public successfully. As a result that we have addressed the monetization of those, of course not only the invested portfolio but the private companies.

There are many ways to exit — not only sales. Sometimes you can sell in the market for the public share, but as a private shares you can have a transaction, or M&A can be another option too. So there are many ways to go exit of the portfolio, and we would like to execute the good options available, and we have a CFO, new CFO for the Vision Fund, Mark Agni, especially has an expertise in demonetization so far. Public listing and pipelines, late-stage portfolio.

On your right-hand side of total fair value, because of the follow-on investment in OpenAI it went to $133 billion. So compared to March end, late-stage portfolio total fair value itself increased by 15 billion. And let me pick up some of the portfolio companies which in the late stage: Prism (formerly known as OYO) — you may have seen in some Japanese market as well — and they've been operating a global hospitality platform, so they have rebranded under the name of Prism and also already made and fighting for public offering, and they support accommodation partners with demand generation, dynamic pricing, revenue management and day-to-day operation. They have themselves managing actually the hotels, but now they are very much focused on the platform, so they have clearer vision and direction of the business models. Now they are also a good promising company. And Klook is the — they offer an online platform for travelers to discover, book tours and activities, transportation, hotels, and more around the world. And we have invested in 2019 first quarter, and the business model itself has been making a good momentum, and we are also excited about this company.

And one note on the PayPay's movement, so we would like to use some slides to share with you. So this was announced on June 4 this year, which was to make T&D Financial Life a subsidiary of PayPay Corporation, so having this company under the umbrella of PayPay so that they will be able to provide comprehensive financial service on top of what they have already. So by having a life insurance business based on the life stage of each user, we'll be able to provide very good comprehensive.

We've been looking into this agenda and this time it made good results. Another one is the capital and the business alliance with Seven & i Holdings. On your left you see SoftBank Corp., domestic operator, PayPay and Sumitomo Mitsui Card, 100 billion each. So the ownership stake itself is about 2.13% in Seven & i Holdings, and we are starting the capital alliance, especially when it comes to PayPay. It is a good achievement here because there are about 20 million customers per day visiting 7-Eleven stores, and 30 million transactions per day made by PayPay.

So utilizing the data in between so that we will be able to utilize and see the future combinations. Number of the store-wise they have 22,000 stores in 7-Eleven, and PayPay has a 75 million user base already. There can be great value generator for each other. Now let me talk about physical AI. Commercial deployment is accelerating across the portfolio companies, including companies under the umbrella of Robot Holdings. Over 30 physical AI businesses are on our portfolio.

I think we can group them into three categories. First, robotics obviously, which should include humanoid in the future — so robotics and AI technology is one bucket. And then automation of infrastructure, like factory automation that has been there for some time. And the third bucket is mobility and autonomous driving. In each sector, those portfolio companies — only a handful of our portfolio companies — should play key roles in respective areas.

And MASA is expecting a lot and spending a lot of time in physical AI sector, and please note, right top, ABB Robotics: we announced acquisition, and by end of this year we should be able to finish approval process and complete acquisition. Upon completion of acquisition, huge operations, huge services across the globe will be integrated, and it should deliver great synergies and accelerate deployment of robots. Last but not the least, financial policy.

As I keep saying, no change on financial policy, which is to maintain LTV below 25% in normal circumstances and to maintain at least two years' worth of bond redemptions in cash position, making sure that we are safe and sound. To summarize, investment amount compared to last year 2025 in 2026 — currently we are kind of controlling the investment amount so far, but the biggest investment we have done so far is in OpenAI — block already executed — so total 20 billion already executed in terms of investment in OpenAI, and 10 more for OpenAI, 5.4 for ABB Robotics, and 3.1 for DigitalBridge, which we announced M&A last year.

So we committed $18.5 billion. We closed our financings one by one. First we entered into a financing agreement using OpenAI shares — I think it's today as we speak — 10 billion of OpenAI, and we arranged LBO financing, max 1.8 billion, ahead of acquisition of ABB's robotics business. So thanks to great support from globally known big banks, we were able to arrange those financing. We really appreciate their continued support. About ratings, S&P kept negative for a long time, but they revised its outlook from negative to stable, which is one of the great piece of news in rating.

As I have explained, we keep focusing on those four sectors to raise our corporate value moving forward. Again, information revolution. Happiness for everyone. Thank you very much for your kind attention, and now we'd like to start taking your question. Thank you.

OPERATOR

Now we would like to take questions. First, we would like to take questions from the floor. Please wait for the microphone and start with your name and affiliation. For those participating online, please access Zoom using instructions provided in the email sent to you in advance. To avoid audio feedback while looping, we kindly ask that anyone asking a question refrain from connecting to any live streams other than the Zoom webinar. If you have questions, please click the Raise hand button and wait until you are called on.

If you wish to withdraw your question, please click the lower hand button. If you are joining the Japanese Zoom, please ask a question in Japanese. Thank you very much for your understanding. We would like to take up to two questions per person so that we can take questions from as many people as possible. Now we would like to take a question from the floor. The very front row gentleman in the middle section, please.

Suga, Nikkei newspaper

Thank you. My name is Suga from Nikkei newspaper. I have two questions, please. First, after July US tech major player has been criticized with the excess investment in data center. Will you keep your amount investing in data center or are you going to change your direction in investment in data center business?

Yoshimitsu Goto, Board Director and CFO

Yes, thank you for your question. Data center projects are announced one after another in United States. I think that the Stargate project of ours set the fire in the market and also there are some arguments that they may be bubble, but we do have a very clear view on demand and supply imbalance. So that supply is very much short. And that is why this project is announced one after another which I believe is a healthy situation. Without securing computing power, technology and the service of AI can be slowed down.

So I believe this is necessary that project owners leading such an investment and we would like to be the part of it too.

Suga, Nikkei newspaper

Thank you. My second question is about OpenAI IPO timing. I would like to ask you. There are some media coverage talking about postponing to next year, but how do you see about the timing and if there is any postpone what kind of impact to your business?

Yoshimitsu Goto, Board Director and CFO

Well, same answer back to you. Actually we are not a company going public, so I have no comment. Well, I cannot comment on the timing. Of course as one of the investor in the company, we are very much keen to see and expecting on IPO of OpenAI.

Marie, Diamond magazine

Thank you. Next question. My name is Marie from Diamond magazine. I have two questions. First, SB NEO. SoftBank Corp. is engaged, so what's the purpose or why? I wonder if you want to build expertise in NEO Cloud. So again size of a NEO Cloud you mentioned 10 gigawatt. And Ohio, Texas are talking about 10 gigawatt. Is it just by accident or what? So as being NEO kind of equal to Ohio or Texas. And also non-recourse financing you mentioned and I understand that you don't want to affect your own business.

So how much would it be in terms of non-recourse financing? A lot of questions around NEO Cloud. Sorry about that.

Yoshimitsu Goto, Board Director and CFO

Thank you. NEO Cloud business itself is led by SoftBank Corp., so details I would encourage you to ask them directly. And you are talking about 10 gig. I think you are referring to Portsmouth project and project itself does not necessarily mean SB NEO project. As you can see on the slide, SB NEO's role is to provide computing to customers. And talking about the non-recourse role again this is a project and this is just one of the typical examples of project financing and off-taker.

Project finance depends on the credit of off-takers. So from SoftBank Group's perspective it's a non-recourse financing. So again I suggest you to talk to SB or SoftBank for more details. So 10 gigawatt is the start of a new service. They mentioned in announcement of course they want to do 10 gigawatt but they want to build demands as they expand business. So NEO Cloud data center is based on assumption of Texas Portsmouth data centers. It's still being finalized which project or how much they get involved in.

Just to clarify. So as a project NEO SoftBank, NEO or NEO Cloud is not a Portsmouth project, so it doesn't necessarily mean this business will utilize Portsmouth data center.

Marie, Diamond magazine

Right. Again, question is about ARM next, especially ARM chip. I'm sure that you started or launched a business of ARM-made or ARM-developed business and from 26, 27, 28, $2 billion of demand is expected. We heard in your announcement or earning results. So how probable it is or are there any upside? I mean how confident are you? How confident are you about the future demand in the next three years?

Jason Child, CFO at Arm

Yes. So with ARM AGI CPU, we did say initially that for it starts shipping in Q4 of this fiscal year and then the combination of this fiscal year and next year. We said initially when we announced the product back in March that there'd be roughly $1 billion in revenue. Last quarter, actually two quarters ago we said that demand after we announced it had already expanded to nearly 2 billion and then this most recent quarter. So last week we said that it's now we have orders for more than 2 billion, but we have not updated our guidance on what the revenue will be because we are still working through the supply chain constraints primarily around wafer capacity. There are some other constraints as well. We have made progress on satisfying some of those constraints, but we're not ready to say exactly how much of that incremental billion dollars plus that we will be able to ship until probably another quarter or two as we get more clarity on both the pricing as well as the entire wafer capacity that we're going to be able to get access to. In terms of the overall demand beyond this year next, which for us is fiscal 27, 28 and then even going into our fiscal 29 which would be SoftBank's fiscal 28, we expect the demand to double the year after that and that's because the order pipeline for AGI CPU continues to grow. And as you heard Goto earlier, we added a couple of very large customers this quarter. We expect to be continuing to announce new customers. So demand looks to be very much on track, possibly even ahead of what we said back at our ARM Everywhere analyst event.

Miyajima, Fact magazine

Thank you very much. Now on to second from the front row. Miyajima from magazine Fact. This year AGM shareholders meeting, Masa was talking his 15 years here that he would like to devote enough nets at the value to thousand trillion yen or that was very much impressed challenge that he announced at the shareholders meeting this year. And that's actually the charm that Masa has. Goto-san, Kimiwada-san, you've been run along with them and once the Masa becomes get older, you also get older along with him.

But how did you think about what Masa said that he's going to be working even more 15 years? And the patent on the generative AI becomes number one. So 3,000 cases that the Masa has applied he mentioned about two, three years ago and I believe that that's the kind of results out of those activities having everything applied that can create the value in the future. So that's one of the kind of a basic plan that you are doing. But the Masa and Goto-san having applying such patent everywhere, what kind of financial benefit do you think there are?

Having 3,000 patent? How many months or how much money has had been spent? Which I don't know but that can be one base for the golden goose. I'm not sure. But how do you think about that?

Yoshimitsu Goto, Board Director and CFO

Thank you very much for your question there. At the shareholders meeting he mentioned about 15 years and we thought about how he expressed because we didn't expect that he gonna say in that way. But we were also happy to hear how he motivated as market cap is growing and Masa the founder himself and also CEO and also leading shareholder that that position has maintained and how we going to come up with the succession plan for such a company is always a question from the investors too.

And we but at the same time like to see Masa showed a great performance even more and he can work so that we would like to support what he needs to do. And recently the patent on the generative AI becomes number one. So 3,000 cases that the Masa has applied he mentioned about two, three years ago and I believe that that's the kind of results out of those activities having everything applied that can create the value in the future. So that's one of the kind of a basic plan that you are doing.

Yes, patent application requires manpower and lots of the time and money as well. In the past few years AI related patent has been applied aggressively by Masa and his team which we tried to effectively address utilizing AI so that we became more quickly in terms of applying for the patent. Still some costs required, but that can be the seeding phase for our future growth of the business. So we actually encourage although there might be some cost come along but still I think that it's good to challenge and the patent is quite interesting because whether to be applied better or not applying is better.

There are some cases like that as well. So that is something that we do have some experts, professionals on patent from the legal team internally so that we'll be able to address patent so that we don't really miss the opportunity.

Miyajima, Fact magazine

So what I'm hearing because you have AIs with OpenAI that allows you to provide the resources to do compared to other big tech players they are in short in terms of resources and so on. But actually you applied more patent application than the others. Is that because of OpenAI investment or the structure or the approach itself has been sometimes studied and analyzed by Masa, which is a great effort he's making I think.

MJ, Bloomberg

Next. MJ from Bloomberg. I have two questions. First about Ohio data center project. According to media coverage Nvidia guaranteed some $250 trillion worth so that OpenAI can these up to 10 gigawatt or something. Can you make a comment on that?

Yoshimitsu Goto, Board Director and CFO

Right. A lot of stakeholders are talking each other or negotiating each other so I cannot make any comment in detail. So once we are ready we'll definitely share with you. Thank you.

MJ, Bloomberg

And second, about OpenAI. Competition of LLM is fierce and Chinese models are getting better and better and SoftBank Group invests in only OpenAI in terms of models. But what's your view on OpenAI's valuation at this moment? And do you have any plan to invest in other LLM or other models than OpenAI? Thank you.

Yoshimitsu Goto, Board Director and CFO

OpenAI's valuation. I think I should ask him Yoda Sento or Mark, can you answer to the question?

Mark

Thanks for the question. So you had two parts but the first part was on valuation. I believe we apply the same valuation model for OpenAI as we do for any of our holdings. And it's three parts basically. And one of those parts is, and one of the main parts in a private holding is what the last round was at. The last round is where we're marked right now in OpenAI and in the absence of any significant news we will stay marked there. But we're always following along with what's happening.

And then did you wanted you had questions about the model.

MJ, Bloomberg

What about the possibility of investing in other LLM models given.

Mark

So we in the past we have invested in various competitors, for example in rideshare but in this case, we are investing with OpenAI because we consider them more of a partner than an investment. And so we are planning to do more things with OpenAI and we are very, very confident in their model. So it's our choice to put all of our eggs in OpenAI as far as LLM is concerned rather than spread it around.

MJ, Bloomberg

Thank you.

OPERATOR

Thank you very much. Any other questions, please? Then, front row in the middle, please. Thank you.

Kimura, NHK Broadcasting

A bit similar to the first question, you mentioned that you may consider slowing down investment, and if you look at the U.S. market, tech share prices have pretty much slowed down. What is your outlook for financing in the future?

Yoshimitsu Goto, Board Director and CFO

Well, I may have misled you earlier. If you are only looking at this number, it looks like a little bit less investment, so that's why I said that they slowed down—looks like slowed down. But actually, we are not a company having an investment budget in advance intentionally. We don't really have an investment budget. It's because we invest from our balance sheet as well, and we try to maximize the performance of it. Sometimes, if you have a budget and you come to the end of the fiscal year and still have a budget available, you need to consume everything, then you just pick the wrong investments, which happens in many companies.

Or if you finish all the budget amount but then find very promising companies, because of budget constraints you cannot invest. That kind of stupid situation happens always for many companies as well. So if you have a good opportunity, you want to invest in that. That's why we don't have a budget for investment. When it comes to financing—coming back to your question—the financing market is not bad, actually. Of course, the interest rate itself has been increasing in the past few years, so there are costs in interest, but we have a certain level of investment yield and challenge to that, then the interest cost can be acceptable to some extent.

When it comes to the size of the financing globally, I think it's quite activated. So issuer and investor demand-and-supply balance-wise, I believe both are quite positive about the financing and how you are going to use that money—for investment and for the real business. In the past 40 years we have experienced the bubble situation. I think the current situation is not really the same. It's not really a bubble because we do have a use of proceeds, and financing itself for the nice, I believe, is going to be no problem for us.

And our financing capability-wise, if you look at our balance of the assets, as we have about 60 trillion close level of the net asset value after the debt, corporate credit capacity-wise we believe that we are in a very strong position from that sense.

OPERATOR

Thank you. Are there any more questions on the floor? Yagi from Nihon Keizai Shimbun, Nikkei.

Yagi, Nikkei (Nihon Keizai Shimbun)

LTV as of August 5th. Thank you. Second question is about your data center plan and its progress. Ohio's 10 gigawatt that you announced in March—since the capacity is that big, I assume you build multiple buildings. So the first building—do you know when the first building will be completed? And again, I assume that there are multiple off-takers that are interested in the project. So again, are you confident in terms of the demand?

Yoshimitsu Goto, Board Director and CFO

As of August 5th, LTV—we don't present in that way. We have a rough idea, but I want to refrain from commenting on that. But you can imagine, as of end of June, net asset value was 72 trillion or something. And based on that, we calculate loan-to-value, and if NAV is 58 trillion then NAV might be widened since end of June, but still in the range of our safety operation. The start of the building—also, building will get started in 2026 as I mentioned earlier, but the overall schedule is something that we cannot share with you now.

But again, once we are ready to share, we'll definitely do that. About off-takers, again, we are closely communicating with off-takers and we are confident in the demands, and we want to make sure that we will find the best solution.

OPERATOR

Thank you very much. Any other questions, please? Then we would like to go on to the questions from online participants. To avoid audio feedback or looping, we kindly ask that anyone asking questions refrain from connecting to any live streams other than the Zoom webinar. Once again, if you have a question, please click the Raise Hand button and wait until you are called on. If you are joining a Japanese Zoom, please ask your questions in Japanese.

Now, we'd like to ask Arauca from ITmedia. Arauca from ITmedia, can you hear me okay? Yes, please go ahead.

Arauca, ITmedia

Thank you. So gain on investment is mainly coming from Intel, you said, which is quite interesting to hear. Any comments about the business development in Intel, or what is your expectation for the future of Intel? If so, that was a positive contribution to your investment gain, right?

Yoshimitsu Goto, Board Director and CFO

Intel—in the past three months, semiconductor names were actually surging, and Intel was one of them. In the April to June quarter, their share price was dramatically increasing, which was quite a positive surprise for us, and that actually contributed to our investment gain. Any expectation for the future of Intel—of course, although it's quite volatile, but as an investment company, we hope that their value can increase more. Thank you.

OPERATOR

That's all for the Q&A session. Thank you very much. This concludes the SoftBank Group Corp. earnings results announcement for the first quarter of the fiscal year ending March 2027. The video footage of this meeting will be distributed on demand from our corporate website. Thank you once again for joining the SoftBank Group Corp. earnings results announcement for the fiscal year 2026 first quarter. Thank you.

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