Softbank Group Corp

Thank you very much for waiting, everyone. Now we would like to start SoftBank Group Co-op Earnings Results Announcement for the three-month period ended June 30th, 2024. First of all, I would like to introduce today's participants. From left, we have Yoshimitsu Goto, Board Director, NCFO. Kazuko Kimiwada, Corporate Officer, Senior Vice President and Head of Accounting Unit. Navneet Govel, CFO, SB Investment Advisors and SB Global Advisors. And last but not least, Jason Child, Executive Vice President, CFO. Thank you very much for understanding that Jason is attending over Zoom. 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. Mr. Goto, please. Well, good afternoon, everyone. Thank you very much for joining our earnings results announcement today. Let me start our explanation on the earnings results for the first three months period for 2024. This is the first page, the first quarter. So this is the end of June number that we are sharing with you. So you see that this is the market status up until the end of June. That was the market. However, after this, we had a big volatility in the market, and this is the current situation. So you can see on your far left at the end of September last year, which was the timing of our IPO. So starting as then in share price and the SPG share price, and also some KP indexes that we tried to compare those movements. You can see the day before yesterday, there was a big decline in Nikkei since Black Monday. And yesterday was the biggest record high increase in share price of Nikkei. So Black Monday, if you recall, 1987, October 20th. On 1987, I graduated from college, and starting April, I started working at Yasuda Trust Bank. And then, I'm one of the survivors from Black Monday, and I believe people here may not at the business circumstance. Many of the media's related people, those young generations, if you see those three days in the past, I understand those are the headlines for the newspaper. But for me, because I experienced Black Monday, I have a bit different angle because in the past 40 years, market structure or instruments, products that traded in the market or the payment speed, settlement speed or the size of the payments or size of the settlement has dramatically changed since then, along with the technology development. Financial engineering has also developed over the time. So if you only see the numbers of the decline, then you may be very surprised, but it's not only that. I believe that there are many reasons for the decline, and I think that we do need to analyze the market and the environment, and based on that, I believe that that was the reason why for the declines on the day before yesterday and the increase in the yesterday, so that we'll be able to see the future. Under such a circumstance, what kind of framework each respective company should be prepared? And what the software been preparing for? Our business model, I believe, is one of the most unique business model. We are investment company. We are strategic investment company. But at the same time, we are also exploring the challenges in the aim of AI era to come. And we do need to see the both sides. Our business model itself does have very affluent assets, and those assets, in principle, are businesses or companies who will be able to take an advantage of the AI era or ASI era to come, as our chairman, CEO, Masa Son, mentioned at the AGM in June this year. Also, those companies with many new ideas, that is going to be in our group. Sometimes we raise them from the scratch, so there are a variety of the angles that we are looking at. So while we're monetizing and also raising those assets, grow the business, but also we have a shareholder's returns, financial improvements. Those are very strong financial status. And as a result, we will be able to improve our balance sheet. and those, as a result, be able to provide us the room for leveraging that capacity. So that can be utilized for the bridge to fill the time lag between investment and divestments. And the important thing is, so on's and off's, or the gas and brake, that those are something that we can completely manage by the company. So more simply put, investment, if we invest, we need money. If we don't invest, we don't need money. So we can manage to do investment or do not do the investments. And also, we can decide how far we would like to utilize our balance sheet and our credit and also financing possibilities with partners of the concerned parties. There are many experiences that we have, and the most important thing is that we can be flexible based on the changes of the market and environments. And that's the kind of uniqueness of our company. Page six, key indicators. This is to remind you, once again, that the net asset value, of course, varies based on the market sales. It all goes up and goes down. Six months ago, at the end of December, our net asset value was 19 trillion yen. In six months, it became doubled to 35 trillion yen. In the past few weeks, What's happening here actually pushing our net asset value down to 25 trillion. So in several months, that value varies, which is big volatility, but at the same time, if you put it into our loan to value as a key performance indicator for a balance sheet, even now, it's still about 10.9% level, which is extremely safe level. So from the end of June to today, 10 trillion yen net asset value decreased, but still the safetiness unchanged in material way. Of course, cash position, if we don't spend it, we can maintain so that we are having the same level that from 4.6 to 4.3, this is only from the foreign currency changes. So... I understand that there are kind of possibility of moving around the figures based on the volatilities and every time of the earnings. What I keep telling is that we are not focused on the short-term volatilities, but the important thing is that what we are convinced in business models and target is going to be consistent and be prepared for that. Here, once again, that I wanted to communicate to you that the safetiness of a balance sheet. So we do have a very robust stability, and based on such a stability, we would like to strive for the ASI realization. So such a robustness stability is something that we prepare. And leader, Masa, and also our teams is exploring the best way for the ASI to come. And this is a three-month highlight for the first quarter period, as I mentioned earlier. Or that you may be seeing, sorry, from the newsflash, that the net loss, net loss, that's the kind of words that I've been seeing on the newsflash, but... We do have an investment gain of $559.7 billion. As of the end of June this year, net assets value achieved record high. We will continuously pursuing the realization of ASI through the strategic AI investments. And for that, ARM is very important. And fortunately, ARM performance continues very well. And Vision Fund has also turned positive from the performance point of view. And loan to value and the cash positions. The financial policy, we will be keeping this policy. And also, we do keep the good balance sheet to be able to be agile in terms of the new opportunities and consolidated results. Quarter on quarter, you see the positive numbers here. Net income is negative 174, but the quarter-on-quarter, it has increased by 303 billion yen, mainly contributed by the foreign exchange. In positive points wise, investment gain, 559 billion yen of the positive figure recorded. So, quarter on quarter, 1.2 trillion yen of the increase. Investment and net income gain and loss. Orange lines gain or loss on investment, you see the steady increase. Net income, of course, this has ups and downs because of the variety of the reasons, especially net income negative and positive in investment. This is the first quarter, which has the biggest discrepancy. And I think that mainly this is also coming from the foreign exchange. gain and loss on investments or from which investments that we are seeing the gain. And here, as a holding company, we do have investments and also investments from Vision Fund. Both of them are in positive this quarter. In the past, one side is positive, the other side is negative. But this quarter, finally, we see both positive.

Now, let me share with you key indicators. NAV, LTV, and cash position as of end of June. Net asset value, plenty, 35 trillion yen. Most lately, about 25 trillion, 10 trillion down, but we'll see how it goes in the market. LTV, very safe level. As I mentioned at the last earning call, less than 10% from investment company perspective may mean we don't do a good job, but again, LTV is very safe level and we have plenty of cash. With regards to the net asset value, recently we saw 10 trillion down. If you go down deeper, I mentioned that It was in 1987 when I joined the bank after graduation I majored in history and industry and maybe I didn't know why I ended up working in the financial business But again, as you can see, since 2000, what happened in the era of 2000? There was a so-called net bubble or dot-com bubble. Back then, far left in this chart, you see a small hill. But back then, we thought the hill looked like a mountain. But now we are seeing similar ups and downs. I think there are similarities in the year of 2000 and now. So what drove the increase and decrease in the year of 2000? How much powerful the internet was and how much value that internet could create? People are watching the upside of the internet and the capability of the internet and then the value went up, but now looking at AI, I think investors and people are looking at the trend in a similar angle. I sometimes mentioned technology advances, and once technology advances, technology would not go back. So technology advancement would lead to added value. We don't know how long it takes before the added value is delivered, but definitely advancement of technology should create added value. Looking at the far right of the chart, if 2024 was on the far left of the chart and in 20 years time I think that we will see the similar picture I experienced a tough time since the Black Monday and also I experienced the so-called Lehman shock And the reasons were clear back then. The valuation was long. And the valuation was created artificially. That was when Black Monday happened and when Lehman Shock happened. So compared to those two big events, the internet dot-com bubble in the year 2000 and historic decline of the market that we are looking at recently the situation is not bad actually from the history perspective on Black Monday Traders were using fingers and hands for transaction and trading But now it's completely different picture Anyway, my message is Market moves in a very short period of time And we have to take into account when we see the market Forex The 10-yen move was seen in the last three months What impact this could have on our value? Is it positive or negative? Weka Yen actually is a positive. Why? Because as an investment company, asset or asset value is centered around the dollar. So Weka Yen had a positive impact on NAV 2.1 trillion yen. From accounting perspective, positive impact on equity, but negative impact on consolidated net income. By the way, if you look at a very gray number, 144.98 yen, which was as of yesterday. So yen got strengthened as much as 15 yen in very short of a time. If you have a plus 15 yen, it could mean 600 billion yen of a positive. So anyway, so a Forex move has an impact on PL and equity and NAV. Loan to value, lowest leverage ever. or the safety level is the highest so maybe we have to do more during our job cash position maintain high level about 4.3 trillion yen this chart shows change in composition of asset held we have been decreasing Alibaba's position for some time and we had over 51% of Alibaba four years ago but now we have over 50% of ARB as of June and so that shows how we are positioned against AI and change in regional composition is shown here Four years ago, we were concentrated on China, namely Alibaba. But now we are looking at Europe more than any other regions. So we mitigated risk of China centric position and liquidity is shown or presented as a percentage of listed shares in our portfolio as of end of June over 80% every year share of listed share had been going down for three years but in the meantime we sold down Alibaba's position and we have gained cash, which is safe. But for investors who are concerned about percentage of listed share, I believe that they are happier now looking at the current percentage.

And here on, we would like to explain to you about our initiative to realize SI. Back in June, Masa shared his thoughts at the general shareholders meeting. And here, once again, to confirm, this is his kind of comments, not me, at quite a big mission as a group that we are driving evolutions of humanity. And that's why we would like to realize ASI to fulfill our mission. And to realize that, we would like to drive forward with group-wide efforts. In these efforts, especially, we would like to focus on those three areas. AI chip, which is going to be even more developing, ARM to be leading that. AI data center is also essential to develop AI. And how the AI can be helpful in people's life. And probably the most easiest to see is robots. So those are the main focus for us as a group for the AI. And SoftBank Group, as I mentioned in the very beginning of this presentation, I believe it's very unique company. This is really difficult to find the peers or the similar company. When we have a dialogue with investors, I believe this is one of the agenda. Because I often asked the questions like, how can we compare with, if you would like to compare with somebody, who would be the company that you pick up? But really, I cannot really think of any company that's comparable to our business or the business model. which makes us very unique. And the cluster of number one strategy is something that I must have been explaining to you. And in this current status, this group strategy still applied. So we are not a group only with the capital or partnership, but we have business partnerships or the... sharing the visions or the missions. So there are many relationships, partnerships that we try to grasp for our efforts so that we can create the organic connections with those people. If you look into one by one for the more specific companies, These are the companies that we start, we've been investing with this ASI aim. Graphcore is one of the company. They specialists at designing, developing, and commercializing chip for AI and machine learning. Especially the engineers resources are very much rich in this company. So we, are very happy to be able to have them in our group to have several potential collaborations and partnership with such company. And SP Energy in United States, mainly in United States, they are pursuing renewable energy platforms, and there are already in operations, which is 2 gigawatts, and in construction, 1 gigawatt, and also they are expanding. So currently it's only solar power, but also exploring the optionalities of the energy source. In Japan, Our energy business has been sold last year, but in the United States, we would like to maintain this agenda with this company. And for SoftBank Corp, This is one of the good examples for our efforts for ASI. SoftBank Corp as a telecommunication operator is mainly leading this data center business. Hokkaido and also Osaka Sakai plant by Sharp has already been announced in utilizing those in variety of the places in Japan. or the focus area AI base is allocated. And we also like to be the lead for the AI data center business so that we'll be able to accumulate our know-hows and expertise. Robots There are several investments that we have done and been announced and shared with you at the Earnings Results Announcement occasion. If you look back, 10 years ago, in 2014, Pepper was launched. Pepper is now not only in Japan, but also worldwide. He or she, the pepper is working hard. And I sometimes surprised to bump into pepper in a very unexpected place. And pepper is also evolving. But not only that, we have some such as cleaning robots or serving robots being also the area that the SoftBank Robotics are working on. And I think that you've been seeing these robots these days. If I go golf course, I happen to see the serving robots at the restaurants or cleaning robots, and I start seeing them more often. When the time is ready that I also like to share the market shares of those products and so on. But I think they are doing pretty good in shares as well. And now that we've been seeing logistics automations or AI robots or the autonomous driving, those are the kind of a path that we are looking at from the SoftBank Group's robotics business. More specifically, these are the investees for the robotics business, Valeo, Symbotics, Greenbox, JV, All Store, Berkshire Gray. So distribution solutions, warehouse solutions that we are partnering, working together to develop the business further.

The other day, We made an announcement on Tempus and press conference was led by Mr. Song.

Please take a look at the video first. You all know how disorienting it can be when you're diagnosed with a disease. Either your own or that of someone you love. It's like walking in a forest where the way feels lost. Seas of trial and error. Oceans of opinion. But what if there was a different, clearer path? one forged by the millions who have come before. Today, an unprecedented amount of data is being contributed in near real time by physicians, researchers, and patients around the world. Tempus is at the center of this movement. We have developed novel technology that collects, structures, and analyzes vast amounts of data, clinical data sourced from electronic healthcare records, imaging data from pathology slides and radiology scans. Molecular data generated at a scale that was unimaginable just a few short years ago. It's our mission to make all of this data accessible and useful. Merged with the power of AI, we have developed a platform that is designed to accelerate the discovery of novel targets. predict the effectiveness of treatments, identify life-saving clinical trials, even diagnose disease earlier. This groundbreaking technology is being used today by thousands of physicians in oncology, cardiology, neurology and other disease areas. But this is just the beginning. Through AI-enabled diagnostics, we hope to route every individual to their own unique and optimal therapy and help shape the treatments of tomorrow. Imagine a world devoid of the diseases that have plagued us for millennia. Imagine prolonged life expectancy. Imagine the end of trial and error. This is data-driven precision medicine. This is the future of healthcare. This is Tempus.

As you can see on the slide, in the United States, Tempest has a partner network of 2,000 hospitals, and they've got 7.7 million number of cancer records in the U.S. Imaging data, sample sequences, and DNA and RN data. They've got plenty of data, and of course, they expand the data set. so that they can build a leading AI-enabled diagnostic platform in the world. It's still progressing and there are opportunities for them to play a key role. They have three product offerings, genomic testing, medical data aggregation and analysis, and AI insights and therapy selection. And people in the medical field are working so hard. And I believe that this kind of technology help them to reduce the workload and work time. And the Tempest business should play a key role in that process. And we established a joint company, SB Tempus, Sopan Group, while investing in Tempus AI also invested in SB Tempus likewise Tempus invested in SB Tempus and they will start in full operation as of August 1st they started full-scale operations as of August 1st And looking at the numbers, invested amount for the first quarter was about 1.9 trillion. Significant increase from the past two quarters. Looking back the history, usually Q1 had a heavy investment quarter because some deals were done earlier than planned until the March and the numbers were revealed in April and onwards in any case we have been building our investments in a steady manner talking about divestment and monetization we continue capital recycling For team of shares, 6.7 million of team of shares sold to Deutsche Telekom for monetization and also all interest in Fortress sales were sold to Mubadala Group And also, likewise, SoftBank Vision Fund sold investments including SenseTime and PayTM for the purpose of monetization So all in all, about 400 billion yen was monetized in FY24 Q1 Let me talk about ARM now First, revenue continues a record high In fact, above analyst consensus of 903 million operating income up 65% year on year at $448 million. The other day when ARM announced their financial results, they shared a guidance Revenue for the second quarter guidance is $780 million to $830 million For the full year, guidance stayed the same from conservative perspective Arm is growing steadily and in healthy manner and Mr. Son has been figuring out a growth strategy for Arm and he places Arm at the center of the group strategy and going forward We want to make sure that we grow ARM as a business to deliver specific cash flow and at the right timing, I believe that ARM will be appreciated and evaluated accordingly. In the last quarter, Microsoft announced in May, co-pilot plus PCs for high AI performance integrating ARM-based chips was announced. And on this chart, if you take a look at the far left, ARM v9 contribution. Relative revenue is a very predictable, steady revenue that can be expected. And ARM's nine base chips contributed 25% to the revenue. And also, 20 million developers accelerating software development on ARM. It was 15 million the last time we shared with you the number. Now, nearly 20 million developers are helping ARM's growth. And major hyperscalers the mega companies in the IT sector, 10 hyperscalers, adopt ARM chip for their data center building and implementation. I believe that ARM will further grow for a long time.

Nexus Vision Fund. So gain or loss on investment in quarterly basis, it turned to positive this time. And gain and loss, cumulative gain and loss on investments, you see it almost flat, and I believe we are on the path to the improvements. Vision Fund 1 and 2, if you break down, Vision Fund 1 for this quarter was very good, 2.8 trillion. Vision Fund 2, because the timing of the investment was relatively high in book value, and also we still haven't spent enough time since the investment. So I believe that the Vision Fund 1 has recovered over time. So I believe that the Vision Fund 2 will also take some time, including some new investments that we would like to follow or the good path to the improvements. And cumulative investment return, $89.5 billion investment cost. And now it's cumulative investment return, $109.1 billion. Vision Fund 2, Investment cost $53 billion. Cumulative investment return $31.1 billion. So we would like to make sure to fulfill the discrepancy here. And the investees or the portfolio companies status this quarter, we had one crystal pie went public this quarter. And other than that, Mainly, data-stage portfolio companies are good in terms of possibilities in becoming a public company, and we are very excited to see those. And these are the good examples of the investments that the Vision Fund made recently, Vision Fund 2 made. since the very tough time last year that we have shifted to the offense mode again, and we back to the investment mode. But at the same time, we are very selective and also very careful in discussion at the investment committee to make sure that we are carefully selecting the investees from the Vision Fund too. Last but not least, financial strategy. The past three months' rating has been very positive for our companies. Of course, we took some time to come this way, but JCR first upgrade in 12 years, S&P, There are some discussions that I also shared with you in the earnings result announcement, but a year ago, because of the listed shares, listed asset shares was the reason to downgrade it, but these were recovered and back upgraded in just one year. Many changes happening, but our financial policy never change. So this is the most highest priority. And while keeping this financial policy, then that we'll be able to keep investments amount and our strategy too. equity market, credit market, wholesale, retail. In the varieties of the aspects, we also like to make sure that we can build and keep the good relationship with those investors. And for that, investor relations will be also, we will make an effort in investment relation activities. So once again, no change in our financial policy, financial strategy for fiscal 2024. Today, we also announced our share buyback. Of course, there are many agenda to discuss for this matter, but at our board, there are enough discussion made. and we believe this is the time to, and we were able to choose the best timing to decide this. This time we decided 500 billion yen over one year to execute. In what way, in how we to purchase is our discretion. Once again, the first quarter summary. As you can see from the number one to number six, I believe I was able to cover this agenda in the presentation. Of course, market is tough, but our financial status is very robust and stable. And our aim, ASI, that we would like to bring it happen as early as possible so that we'll be able to provide, we would like to support providing ASI services. And at the same time, we would like to lead such a movement as SoftBank Group. That concludes my presentation for today. Thank you very much.

Now we'd like to take questions. First, we'd like to take questions from the floor. please wait for the microphone and start with your name and affiliation. For those who are on Zoom, please press raise hand button and wait for your name is called. If you'd like to withdraw your question, please press lower hand button. Please also refrain from connecting to other live stream to avoid any echoing. If you access to the Japanese Zoom, please ask a question in Japanese. We'd like to take up to two questions per person so that we can take questions from as many people as possible. First, from the floor. Ono from Yomiuri paper, two questions. Looking at the latest market condition, you mentioned that your financial policy remains the same, but I wonder if it could have an impact on your investment policy. goes down a little bit, are you going to be more cautious or careful? And the share price goes down, and that could be an opportunity for you to make an investment. Would you like to accelerate the pace of the investment? What's your view in terms of the market condition versus the impact on your policy? And the second question, Koto-san mentioned that at the IT bubble in 2000 and recent situation are similar. And you mentioned that the situation is not bad. Could you elaborate on that compared to the Lehman Shock and Black Monday? Because you have high expectations to AI, for example, that is more real. Is that why you mentioned that this situation is not bad? So again, if you could elaborate on your view when you mentioned the situation right now is not bad. Thank you very much for your question. The first question. well the day before yesterday the biggest dip in history and yesterday biggest rise in history the market is so volatile and we are of course cautious how the market reacts could lead to valuation when it comes to new investment. I think in a sense, maybe we should be protective and conservative, but in general, I think it's a good opportunity for investment in general. For example, we have 4.3 trillion of a cash position. People are asking, how are you going to use the cash position? We have 4.3 trillion on our balance sheet, which means we have a very healthy financial position. So we already have such a financial healthiness. When you make an investment, the healthiness gets worsened, but we need to figure out the best balance. We want to make a new investment, and also we want to focus on return to shareholders. We made an announcement of the share buyback, for example, because we thought now is a good time. When the market trend is downward, that could pose an opportunity for investment. But again, since the market is so volatile, we have to be careful. But in general, a good opportunity for new investment in general term. to your next question. I don't want to elaborate too much on what I said, but when the dot-com bubble was bursted, the leading companies back then were Amazon, Microsoft, and Google that emerged later. In fact, those companies are the top 10 in terms of market cap now Back then, we didn't really appreciate their value in the year 2000 something was unclear but we had high expectation to the internet but we didn't know exactly how much added value the internet could create let's say we have property and how much the property cost There was a tulip bubble. And when it comes to speculative investment, there is value for sure. But in the era of bubble and in the era of evaluation for the future opportunity, there might be differences between those days. Well, next question.

The front row, long sleeve, white shirt person, please. My name is Shikata from Nikkei Newspaper. I have two questions, please. First, current equity and credit volatility globally, what do you think is happening? That's something I would like to ask you, and also your financing. Is it going to be impacted? I believe that you are raising in yen and investing in overseas. but raise loan or refinancing bond issuance. Will you continuously address those? My second question is about buyback. Is this I believe referred to some Masayoshi discount. But is this because of the too much discount? Is this something that triggers to come to this end? And also, share price sharp decline, was that the main reason for your buyback execution? So market volatility reason, I believe there are many scholars in the world. So maybe I can only see those, read those. Academics, people also explaining, analyzing. But sometimes I may not show that those, for example, the employments carry trade. There are many aspects can be a reason for that. But in the past two days, volatility may not be the only reasons. We can already calculate that. And there are speculations in the past six months of the market movements and investors, what kind of activity they should be doing. And that judgment has been amplified. And that's somehow that I see the current situation. For financing, at this moment, we don't really see any big change. We've been following the credit market and looking at the secondary market and the CDS, but I haven't seen any material issues or material situations for those market. If you see credit point of view, our healthiness or soundness of the balance sheet is the most important. And that actually hasn't really changed. Our soundness of balance sheet has not really changed, even we see such a market volatility. And for the credit investors or analysts and myself, I believe we are on the same page from that understanding. What was your second question? Once again, sorry. Buyback. For the decision on buyback, there are many agendas when it comes to buyback. Like you said, net asset value discount is one aspect. Share price itself is also one agenda. Environment, when it moves dramatically, how it goes, it can be In the past few weeks ago, our share prices are like ¥10,000, and all of the sudden went down to ¥6,000. And how are they going to move? It's not logical figures for our share price, but market itself is actually overshooting or down shooting and goes ups and downs. Sometimes it declines continuously, sometimes it's not. So whenever we have such a worst case scenario, then we decide what can we do for the stakeholders. And we do, I believe that that needs to be communicated to the market. What is the preparations? What is the framework that we are preparing for? But at the same time, in the previous question, that can be a good opportunity for investment as well. And if this confusion even goes further, then that even more important thing is a balance sheet soundness. So we would like to take a good balance in between those two and decide on this 500 billion yen of the buyback. Of course, return to shareholders. is one agenda for us as well. So the answer is not one answer. There are many kind of agenda and come to this conclusion of announcing this buyback program. And was Elliot come to your thoughts on the buyback decision? Investor Elliot, you mean? I don't discuss any specific communication with specific investors. Important thing is our decision is made by ourselves. That's all.

The next question from the floor. MJ from the Bloomberg. Again, about the buyback, so communication with Elliot or in opinion, Elliot did not have an impact on the decision of the share buyback again, just to ask you again, like I said, I don't discuss with you about a specific dialogue with a specific investor. And let me reiterate, for this decision of share buyback, we have made our own decision after discussion at the board level. So we are not a company that has made a decision after impact from somebody else. Then the question, the first quarter's investment went up so much compared to the previous fiscal year, sorry, first quarter. So again, for the full year, the group and the vision fund, could you have a comment from the group, Koto-san, and the vision fund from Navinit, maybe? How much investment are you planning for the full year? We don't have budget for a full year when it comes to investment. When we discover a new opportunity, we make investment. That's how simple it is. and how much what makes what decides the amount of investment we have a finance position of course a loan to value a cash position those are key indicators need to be maintained first that's the highest priority then that could lead to investment capacity that have in 2022 2023 about 3 billion investment was made respectively from our experience perspective this kind of a speed of investment could be the base but if we find more opportunities we have a good capacity for investment so we will see whether those good opportunities will emerge. Thank you.

Any other questions? The person in the front row. Narabe from Asahi Newspaper. So the previous question may be similar to the earlier question. A few days ago, Intel Shark was called in the U.S. equity market. Intel's share price declined by 20% or so. That came along with the headcount reduction and also the delay in the semiconductor. Those are the kind of people's expectations, not only Intel, but others. semiconductor names are declining, same as ARM. Under such an environment, I mean, how do you see such a situation? Is it AI bubble or semiconductor investment or the NVIDIA itself? Maybe bubble. There are people saying that too. And how do you see that situation? And would that be impacting to your investment strategy? Will you please answer those? Intel Shark. There are many people saying about the reason why or what. I read those, too. And also in the past few weeks, NVIDIA and many names, semiconductor names in Japan and overseas showing some declines. And there are many insights. And each respective insight has a good reason. But the movement was large and sudden. And in the past six months, I believe they have increased. so that there was room to decline as well. And the increase was probably because of positive valuation accumulated in the past six months that built such a movement in share price. And maybe right now is a kind of a timing to revisit the valuations of those. Of course, in the past six months, the market judges those variations. And now that the people start revisiting a little bit critical ways or checking whether that's real variations. Of course, we are supporting AI and we are believers for AI to be changing people's lifestyles and we are very much believer to that the air is going to be changed of course that the timeline is a bit different we timeline maybe needed longer than we expected and in the meantime market like of internet bubble to year 2000 has some kind of a volatility there and the same good things could happen so we have a kind of a very sound balance sheet in company so that we can take time to look at those movements we don't want to do any extreme things when the situation is volatile.

Thank you. Any other questions from the floor? Thank you. From the writer, I have one question about the share buyback. Sorry to ask you again about the share buyback. Going forward, do you have a plan to increase the volume? And what kind of discussion was made at the board level?

So this amount or the size was also discussed at the board of directors meeting. That was one of the main agenda. and we have a good discussion there, and we come to the conclusion to come to this size. Not increasing from here, but we may consider a new program when necessary. This time, we come to this conclusion, but in the Board of Directors meeting, we're always keeping return to shareholders as a very important agenda to discuss. We've been continuously discussing that, and this time, Although that this happens a while, last time was a bit a while ago, but still that the every board of directors meeting, we always having this discussion.

Thank you very much. Any other question from the floor? If not. Now we'd like to check question from the Zoom participants. Again, please refrain from connecting to other live stream to avoid any echoing. Again, if you access to a Japanese Zoom, please ask question in Japanese. First, Nagoshi-san from NHK, please unmute and speak. Can you hear me? Yes, we can Again, my name is Nagoshi from NHK I have two questions, maybe similar questions In 2017, SoftBank Vision Fund was established and you transferred from a mobile business to investment business. It's been several years. You have been focusing on investment in AI. And what's the performance? Where should I look? if you want to see the performance of your investment in AI sector. That's the first question. And second, ASI. You often talk about ASI. ASI is not materialized yet. And also, you mentioned the internet bubble in 2000, and there were Google and Microsoft back then. as well as now NVIDIA, OpenAI, Google are leading the ASI or AI sector. So what kind of role that SoftBank Group wants to play in the era of ASI? If you could elaborate on that, please. Thank you. Yes, Vision Fund started in 2017 and you asked about performance. investment and performance of course you want to see the performance because it's a fund business at the time of 2017 the AI world back then and the AI world that we are seeing now is very different Vision Fund, ARM in 2024, and SoftBank Group in 2024. Through the Vision Fund, we have been trying to, future markets, we have been working hard to make investment for the future, and we have been building our expertise through the course. In that journey, we had seen ups and downs but investment in AI has just started and failure investment isn't good experience so we want to take it as an asset so that we can leverage the expertise that we have built for a future investment. And the expertise that we have built is the biggest asset that we have. And what was the second question again? Sorry. ASI. Yes, ASI. The concept of ASI Of course, Mr. Son and us have been talking about the concept of ASI. I'm not an engineer background, and I am a finance guy. So I am learning ASI. In fact, we are all in the learning process. Who could be the leader of ASI? Nobody knows. Some potential leaders are there. including the names that you mentioned. those companies should be able to lead ASI and communication with the management team of those companies should help us to learn more. And Masa, in fact, mentioned at the AGM, he talks with Sam of OpenAI and leaders of the hyperscalers. He has been talking with those leaders. And again, still in the learning process, But at the same time, we have a chance, we have an opportunity for try and error. We can accept some risks because we are still at an early stage. So in that process, we will see what we should do to capture the potential of ASI. If I may ask you a follow-up question. You talked about Graphcore in your presentation, and I'm sure that you have an arm leading your business. You acquired Graphcore, but for ASI, you put a semiconductor at the center for ASI or AI itself when you think about AI the heart of AI definitely is the chip and the semiconductor and chip and ARM is the leader absolute leader of the market in terms of a chipset and the brain of the AI so naturally ARM a key role in our AI strategy.

Thank you. Now, next question from Mr. Masuno from Nomura Securities, please. Yes, this is Masano speaking. One question on Graphcore acquisition. Objective of this acquisition, I have only read the newspaper article and Microsoft who didn't use so that has to reduce the headcounts and so on. And I believe securing the headcounts because ARM do have an engineer, but excluding ARM, SoftBank side does not have enough engineers. So I thought that you try to lock in those number of engineers through the acquisition of Graphcore. Only reading the articles, those employees of Graphcore lost stock options, and I wondered that can we retain those employees? So retentions of the employees, how you collaborate with engineer, that I wanted to hear your objective of the acquisition of Graphcore, investment in Graphcore. So as I mentioned earlier, Graphcore in AI development, we do require lots of resources with expertise on this area, but not only the Graphcore, but we do a lot of M&A transaction with many companies in the past. People is the most important thing. So when we acquire or invest in any company, having such resources, having such people is the main reasons for the investments. You mentioned about some articles, but that's the end that we would like to make sure we have a good technology and also people who support this technology. That was the main objective for such transaction. So at AGM, Masa said he found the missing piece. Is this graphical? Does he refer to graphical? That's we have to ask Masa. OK, understood. Thank you. Thank you very much.

Thank you. The next question is from Mr. Hugo Bloomberg. Can you hear me? Yes. Thank you. the earning result of the first quarter bottom line was a negative but for the full year negative numbers for three consecutive quarters but you posted a net loss for the first quarter. I understand your explanation of NAV, but for general investors, whether a company makes a loss or gain are very important for general investors, including retail investors. So what's your view on that net loss you posted for the first quarter? And second quarter, can we expect gain as opposed to loss. Thank you for your question. We communicate with investors and how I feel, how we feel by communicating with investors is as follows. Investors view net asset value as the most important KPI. Of course, profit is important and ups and downs of profit is the measurement for decision for their investment. I think they are looking at the net asset value as a tool for their making a judgment of the investment as opposed to net gain for the current quarter I cannot make a comment on our expectation of the net income of course there is something that we can control and there's something we cannot control for example forex we know that there are different opinions but again I cannot make any comment on the expected income or loss for the quarter related question when you turn a positive would you do you want to emphasize the positive number but when it comes to negative numbers you may want to, you may touch upon share buyback, for example. You mentioned that asset value is very important to KPI, but without share buyback, I assume that you might make a different move for investment without a share buyback. it's difficult for us to understand your performance so in order for us to or help us to understand your performance positive or negative as the bottom line is I think very important so again for the outlook for the current quarter There are a lot of uncertainties, so you may not be able to say in exact numbers, but direction wise, I understand your quality is good. There are investors with different asset classes. So again, Could you show us direction about expected earning result? Like I said earlier, I cannot make any comment on expected bottom line or outlook. We don't disclose outlook because we know that our bottom line changes depending on the market condition and other conditions. That's why we don't disclose guidance. And whether positive or negative, I'm sure that there are people interested in positive or negative. But again, our investors, I believe, When you see success as an investment company, I believe that our investors are looking at NAV to see whether we are successful or not. And I hope that I answered to your question. Thank you. Just to follow up, looking at the IPO market, The market is very volatile in a turmoil and very difficult to go IPO. In fact, IPO numbers are going down. So from the recoup of investment perspective or monetization of investment or exit from the investment perspective, what's your outlook for this quarter? Again, outlook, I cannot make a comment on the outlook. Sorry about that.

Thank you. For the interest of time, this was the last question for this meeting. Thank you very much. This concludes the SoftBank Group Co-op Earnings Resource Announcement for three months period ended June 30th, 2024. Thank you. Thank you again. 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.

Corporate Linux Results Announcement for 3-month period ended June 30, 2024.