Softbank Group Corp

Thank you very much for waiting, everyone. Now we would like to start the SoftBank Group Co-op Earnings Results Announcement for the fiscal year ended March 31st, 2025. First of all, I would like to introduce today's participants. From left, we have Yoshimitsu Goto, Board Director, NCFO. Kazuko Kimiwada, Corporate Officer, Chief Sustainability Officer, Senior Vice President and Head of Accounting Unit. Navneet Govel, CFO, SB Investment Advisors and SB Global Advisors. Jason Child, Executive Vice President and CFO, ARM. Today's announcement is live broadcast over the internet. Now I would like to invite Yoshimitsu Goto to present you the earnings results and business overview. Good afternoon, everyone. Thank you very much for sharing your time with us today. So today is a kind of a summary for the fiscal year, a whole year, full year. So let me dive into the presentation. So the past one year, economical trend, market environments, it's been very uncertain, very unclear, continues to grow. U.S. tension has been escalated. Market, including Japan, has been confused with the situation. At the same time, unfortunately, we've been seeing ongoing conflicts across the regions. And after Mr. Trump assumed president, there are many policies, direction changes, which also impacted to the market. Of course, leaders, head of the countries, they always focus on the prosperity of their own country. But when you think about the worldwide peaceful system, optimal for everyone, which everyone has been enjoying the free trade in the past, but the free trade also making some disadvantage as well. And from that sense, U.S. position is not always selfish. The cost for maintaining the peace in global wide is something that we need to focus. Otherwise, we cannot really solve the situation. And I believe tariff is one of the options for that solution as well. So I believe that's something that we need to focus, refocus once again from the market and financial industry as well. And under such circumstance, how are we going to do in SoftBank Group? Without any change, we keep focusing on Our corporate philosophy of information revolution, happiness for everyone. This marks 44th year since the foundation of the business. So from the beginning of the company, beginning of the business, we started with the distribution of PC software. And that was the motivation to start the business by Mr. Son. And gradually, we started... revisiting what is the information revolution every time and then. Information revolution right now is AI revolution. From AGI to ASI, how can we benefit society and the people, and how can we address And how can we play the role for such changes? That's the kind of things that we always need to pay attention to. And this has been used for the AGM last year. So to make this ASI, realize there are four things that we need to focus right now. First is the AI chip. This is going to be the core of the AI so that the ARM and other companies need to focus on AI chip and also robotics. which also requires data center to support for the evolution of the AI and also the generative AIs. And for that, we need energy. So those are the agenda that we've been thinking for the past few years. And this year, I believe that it's been a year of green shoots. More specifically, I believe these are the actions that we made based on that understanding. First, we announced the Stargate project in partnership with OpenAI, Oracle, MGX, and at the same time announced the Crystal Intelligence with a partnership between SoftBank Corp and OpenAI. An additional offload on investment to OpenAI has been committed and up to 30 billion upon full syndication, and also decided to acquire Ampere for $6.5 billion. That's a part of our strategy for the future growth of our AI strategy, AI revolution. And that is expected to be closed in second half of 2025. So we were able to make such big steps in this fiscal year. And many people wondered, what's Sopsbank doing? What are you going to do? There are many questions also concerned about what we are going to do. But this time that we were with this fiscal year, we were able to show what is the action that we are taking. And for the fiscal year 2024, as a financial summary wise, these are the highlights. First of all, we've been seeing the weaker performance of tech stocks so that we've been seeing also the big market volatility and net asset value at the end of March. 25.7 trillion down 2.1 trillion year over year. But still, 25 trillion net asset value with the high liquidity, which I believe is the only one company in Japan which has a high liquidity in net asset value. Also maintaining financial policy on loan-to-value. and cash on hand, no change for the fiscal year 2025 as well. And net income of 1.15 trillion, up 1.38 trillion year-over-year, first profit in four years. As an investment company, most important KPI has been... bit different from enterprise value, I believe. However, still, net income, having a net income, profitability is a very good thing. So I believe we are very happy to see this profit in four years. And progress toward realizing ASI, so that's target announced. Following investment in OpenAI, quite a large number, amount has been announced. These are the highlights for the fiscal 2024. Key indicators. These three indicators we always revisit with you. Net asset value, as you saw, 25.7 trillion. Loan-to-value 18%. Compared to last year, March end, 8.4%. 10% point increase. But at the same time, We have guidelines of the 25% for loan to value or safety level so that we still have a very good headroom there. Cash position, as we actively made an investment, so the cash position decreased from 4.7 to 3.4, but still 3.4 is very much good level of the cash position from our understanding. And, of course, our next announcement is to show you the end of the quarter, which is March end. However, our net asset value changes based on the share price. So based on this morning's share price, we made the performer numbers here. On your far right, as of this morning, net asset value 27.4 trillion recovered from 25.7. So about the same level as last year, March end. Don't you value also being improved? Cash position, we've been spending a little bit, so 3.3. That is the latest, latest performance numbers because we are the company watching the balance sheet. So I also wanted to share this performance number with you. And these are the history of the net asset value. Net asset value is the most important indicator for us to see a business. Our share price is coming from here, I believe. So, of course, market changes varies every day. It goes ups and downs. And if it goes up, we are happy. If it goes down, it's unfortunate. However, it's not something that we should be being happy or not happy every day, but we should be. It's not a quarterly basis. It's not the annual basis. But I believe we need to see 10 years, 20 years as an investment company to end. Whether are we showing the tendency to increase our value? And from that sense, I believe this is the most important side to share with you. Cash position. We have an ample financial resources, 3.3 trillion. This covers two-year debt redemption, which set it for our financial policy. Loan-to-value, 18.0% as of the end of March, 20% pro forma basis. Our policy is to maintain the loan-to-value less than 25%. As of today, we still have a very good headroom here. There may be some fluctuation here. Sometimes we kind of hit the gas for the investment activities, but sometimes market volatile so that it may. hit a 25% threshold, but still, I believe that we do need to make sure and share that how we're going to bring it back. But at the same time, try to avoid such situation. We would like to manage our financials as much as possible.

Now, consolidate the results. Net sales, 7.2 trillion, up by 487 billion year-on-year. mostly driven by SoftBank KK. Gain on investment was 3.7 trillion or up by 4.2 trillion. Income before income tax, 1.7 trillion. Net income, 1.1 trillion. So as you can see, our performance was pretty good last year. Let me elaborate on gain on investment later. So if you could go over each topic, net income. In FY 2020, we recorded almost 5 trillion, but we have been suffering negative numbers since, but it's been improving. And in FY 2024, we saw the positive number for the first time in four years to 1.1 trillion. correlation between gain or loss investment and net income on quarterly basis but the trend wise it's been going up in the latest quarter we posted a very strong result which we are pleased with And talking about gain or loss on investments, which are fluctuating every quarter. So I should elaborate on this. Sometimes we sold assets earlier or with the prepaid for the contract like Alibaba. We monetized based on the fixed share price. And then the share price went up. on our accounting basis we can post up gain but we also have to record the derivative loss but from investment gain or loss perspective we cannot net out so if you can look at the colored bars those are including Alibaba, for which we already sold shares due to prepaid forward contract. We posted 1.5 trillion gain on investment, but dotted line shows derivative loss. For example, Q2, 1.5 trillion, and Q4, 1.2 trillion, and Q3, 686 derivative gain. In Q3, of 3.7 gain loss on investment, our real power is reflected in the colored bars. All in all, this is the final result. Gain or loss in investment is reflected in income before income tax. So deducting a derivative loss, our actual capability is around able to yield around over 1 trillion yen of income. or gain on investment. Foreign exchange. Well, it was fluctuating in the last quarter. For example, as of March 31st, it was $151 last year. But as of March 31st, 2025, $149 a year. But in a span of one year, it was a little impact on our result.

And I'd like to share some segment-based reports, starting from Vision Fund. This quarter, as a profit, a gain, and actually the Vision Fund 1 contribution was lost. Vision Fund 2 was lost. due to the public securities impact was there. Maybe we can touch on a little bit more details later pages. And here is the breakdown of gain and loss. If you see the Vision Fund 1, dark blue, mainly by dance. And based on the valuation, this is coming from the market factors. So as a result, out of the 1.8 billion numbers, majorities are coming from this market factor, preliminary guidance. And on the right-hand side, Vision Fund 2, the green one is a positive one, which is primarily open AI. So originally, we had a portion already, and in April, made the latest round and using that valuation as referring to recent transactions. But the public portfolios were a bit of a drop. Although it was a very good market in India, however, some slowdown and also the drops in share price of those portfolio in India was one of the reasons for that. But hopefully that we'll be able to see the good recover from there. And here is the cumulative gain and loss on investments. There were some big drops in the past, but now that we are coming very much back to the water face and There are still good pipelines for the Vision Fund, which is something that makes me excited, so that after this, hopefully, we'll be able to see better numbers going forward. I'm convinced that we'll be able to share good news going forward. And here is the cumulative investment return. Vision Fund won $90 billion investments, performance $113 billion, pretty good so far. On your right-hand side, Vision Fund 2, 60 billion investment. We are still return here at 37.9. So we would like to show you the good return of the performance of the Vision Fund 2. And here are the pipelines for the future growth. So from the left-hand side, We have made 55 listings of the portfolio companies since the inception of the vision fund. In fiscal 2024, five companies went public, a little bit smaller than the other years, but there were good IPOs. And also, late-stage companies, which matured in the way, saw that the total fair value of the late-stage portfolio is right now $36 billion. And these are the logos of the late-stage companies. Not only this, of course, there are others as well, but these are especially the highlights. For example, ByteDance, Klarna. Klarna actually was ready for the IPO, but has postponed. Quebec, Fanatics. Of course, OpenAI. Those... can be the good upside for the future after the IPO. Of course, I forgot the pay pay, not to forget a pay pay, one below the open AI. Those are actually the good potential contributor for the uplift of the performance of the Vision Fund going forward. And the new investments in fiscal 2024, There are several, but for example, these are the companies that we made in fiscal 2024. You see the open air logo many, many times. But at the same time, Helion, this is the next generation fusion technology company. It may also can be the good driver to changing the world. Green, Runaway, those are great companies too. So those companies that relates to AI and AI revolution and also the expected good upside, it's something that we Vision Fund team working on to explore so that we'll be able to find those good numbers, companies.

And ARM is also a big... in our portfolio arm posted a great result steadily performing well in fi 2024 they posted record high annual revenue license and other revenue royalty revenue so again it's been going well Non-GAAP operating income grew steadily, posting 31% increase year on year, which is great. So what is the growth driver of Royalty Revenue? They have some building blocks of their revenue, including Royalty Revenue. computer subsystem should support further growth of royalty revenue. CSS is an IP package with ARM design. By adopting CSS, you can reduce the development time and cost. Royalty rate of CSS is higher than ARM9. In the past, CSS was adopted in data center, mobile markets, and PC. Then they signed the first automotive CSS license agreement with a major EV car OEM. So as you can see, As CSS is going across diverse markets, we can expect more royalty revenue. From the perspective of accelerating further penetration of ARMv9, which also supports royalty revenue. um v9 is the latest cpu architecture which has been deployed in mobile pc data center and automotive sectors and for the first time they announced cortex a320 which is the smallest arm v9b cpu implementation for iot and edge devices We're talking about edge AI, which is going to be more and more important going forward. Not a cloud, but on the edge side, device side, more and more demands are there to process AI on device side. And ARM plays an important role. Why? Because ARM's solution has energy efficiency improvement by 50%. so with limited power edge needs to run and focusing on edge devices is going to be very important and renee arm ceo said ai is everywhere you cannot run ai without arm So HAI's penetration would be supporting ARMA's further growth going forward. ARMA's guidance was announced for the first quarter of FY2025, revenue-wise, from $1 to $10. 1 to 1.1 billion, for example, or 6.5% to 17.1%. Compared to last year's quarter, non-GAAP operating expenses expected to $625 million, they have not announced a full-year guidance, only quarter guidance, because things are so fluctuating, and the tax was... tariff issue could uh uh make a lot of changes going forward so um uh made a decision not to disclose a guidance for the full year and here is the opening eye following investments

This March, we had committed follow-on investments in OpenAI. Commitment is up to $40 billion, of which $10 billion is syndicated out to the third parties. So for SoftBank Cruise, point of view, it is up to $30 billion. There are some agreements, and this $40 billion... One of the scenarios is that the $40 billion can be reduced down to $20 billion. As you may know, the OpenAI's reorganization, whether it's going to be completed or not, is one of the agenda. And without such completion this year, This 40 billion will be reduced down to 20 billion. Of course, we are expecting and hoping to be able to see the good completion of the reorganization. And based on that, we will be making our activities for the financial activities. And the advantage of OpenAI is Back in 2018, GPT-1 was launched and GPT-3 in 2020. So here that the people start realizing the name of OpenAI, CHAT-GPT. Some people may say that what was this company, what service they are providing? But after then, they are making a steady evolution. And in addition to GPT, they are also launching the inference-enhanced model. And this relentless technological evolution has been made by OpenAI. That made a big delta between them and the others. And that actually keeps them in a very strong position in the industry. this much weekly active user actually reached to 500 million. I also like to share the comparison data with the competitors, but we don't have the most accurate numbers, but I believe the market share of the OpenAI can be around 80%. So they have a very big advantage in terms of the market share from my understanding. and the delta with the competitors is very large. So this was also touched at the third quarter announcement, but once you have such a big difference, this is really difficult to exceed the frontrunner. So in this stage, because OpenAI has been developing their service and products in a very rapid pace, so that they have they'll be able to maintain the strong positions in the industry and now that i believe open air is a service becoming a de facto standard for the world users and that is also making the great value for the company and stargate is a project that we announced this project by developing this project, we will be able to provide a data center, a huge data center. And for that, we will be having a collaboration from the chip makers, energy power producers, power generators. So with those collaborations, we will be able to provide the data center capacity to OpenAI so that OpenAI will be able to enhance their service and products so that the application layers or the users of such service will be able to even develop, afford for their services and products. And that will change the people's lifestyles. So Stargate, by partnering with OpenAI, will be able to transform the society and the people's life. That's something that I am expecting from here. And the Stargate programs here, right now, There are more than hundreds of proposals being made, and we are having due diligence for those sites. But still, not being able to announce first yet. I believe that one will be coming out from the state of Texas. Maybe first, second, and third will be coming from the state of Texas. But there are several proposals. going on parallelly so that we are not yet sure. I cannot really be specific which one will be the first, but I believe we are very close there. But there are some media reporting and so on, and some media covering that the banks are hesitating to finance something like that. However, that's not really true, that actually we are very much making a progress and making good steps here.

Overview of Crystal Intelligence, which the SoftBank and OpenAI signed a partnership agreement to develop Enterprise AI Agent. And SoftBank plays a key role in customizing for different customers, and customized Crystal Intelligence should be marketed across Japan. For that, we decided to establish a joint company, OpenAI Japan. Talking about Crystal Intelligence, what would happen with Crystal Intelligence? Miyakawa-san announced the financial results the other day and he said that they were discussing with OpenAI and try to develop a best solution for a company to transform the business management overall, not only optimizing individual business areas, but also completely optimize the corporate as a whole. Phase one was individual optimization which should not have a positive impact on the corporate-wide business management. So, Crystal Intelligence should help a company to completely transform and optimize the overall business management. Again, from individual optimization to overall optimization as illustration, if you can look at the left-hand side, with AI. you could implement different teams or different organizations, but those individual organizations are not necessarily coordinated well. But with crystal intelligence, by having AIs working together across the different business units, this should help a company to completely transform the business management.

Acquisition of Ampere, which was announced in March, total $6.5 billion. Quite a large number here. So it's been a while since we announced a large amount of the investment last. But closing expected to be the second half of this year. And company overview here. They have about 1,000 engineers, AI cloud, AI-focused semiconductor designer company. And they actually design ARM-based server chip for cloud and AI specifically. And this, actually, ARM used to be the shareholder of this company as well. So this is another thing that I wanted to And the reason for the rationale behind our position here, there are three points. First, that we wanted to secure the highly skilled engineer. So they have about 1,000 very matured, well-trained engineers there. And this is also the company that are playing a very important role for the semiconductor design. And they have an expertise in taping out chips and So they have a lot of experience in several products that they've been... working on the taping out of the chips, and that rich experience is also important, which means I believe they have a very good project management capability. In addition to that, this company can also complement ARM's design strength because they have been designing ARM-based server chips for cloud and AI. so that that's going to also enhance and complement the capacity and capability of the group overall. So with that, we hope we will be able to strengthen the group's semiconductor business to realize ASI. And the SoftBank Group's AI strategy that is becoming clearer with those, I believe, last year, In addition to Ampere, we also had an acquisition of Graphcore. So Amp being a center, we've been acquiring those businesses of Graphcore, Ampere, so that we'll be able to enhance the AI compute. And with that, we would like to... store the necessary computing power to the data center with Stargate. And then with the latest AI model can be utilized for the AI applications. so that these companies are going to enhance the quality of AI and the quality of the company's business. So that's going to lead to the transformation of people's working style and the lifestyle. By having these three companies under the umbrella of SoftBank Group, our semiconductor engineers count up to 8,400. For other Japanese companies, having such a large number of engineers is very few. Of course, Arm, Graphcore, Ampere, they are not a Japanese company. However, the SoftBank Group is a Japanese company. They are our group companies. They are our family, so that we believe... This is a good number that we have as capabilities for the engineers.

Next, PayPay. They started preparing for IPO. PayPay is quite a young company. But they fully utilize the resources in their company and the business model of PayPay. I believe that MasterSong has a great contribution to building business model for PayPay. SoftBank, LineYahoo, they are working together. And we are working with SoftBank and we are working with PayPay, sorry, through SoftBank, Yahoo, and also investment made by SVF and PayTM provide a technical support to launch PayPay system. So we really appreciate PayTM's great support at the beginning of the PayPay process. So it's been busy. last years, and before they knew it, they realized they have over $68 million in just 45 years since launch. PayPay is used by one in two people in Japan and two in three smartphone users. So PayPay has a very strong position in the market share. and they have a pretty decent KPIs so first they get coverage and then go deeper in other words get the market uh as wide as possible even though uh spending a cost and then once you've got the great coverage you should to shoot for generating revenue and income ebit uh fi 2024 was 45 billion and gmv 15.4 trillion or 23 increase year on year so i believe that pay pay is fully ready for ipo so as a company they are ready but is it enough not necessarily why because market condition is very important again Market has been volatile in the last 12 months, whether this year or next year or in three years. We never know when is the best timing for PayPal to go public. So looking at the market conditions and PayPal's corporate maturity level, they should figure out the best timing for IPO. And they completely transformed themselves from just a payment application to digital transformation. They reorganized their structure to support card business, banking business, and securities business. So they are now very decent business. financial platform and pay-based value should be increasing further more.

In financial strategy, basically no change. That's the most important thing. So however we see the differences or the changes in the environment, we We'd like to ensure full readiness to promptly shift to a more defensive financial operation when necessary. Our financial policy unchanged, which is maintaining a loan to body below 25% and also maintaining at least two years' worth of the bond redemptions in cash. So Mr. Trump just celebrated the 100-day anniversary after the assumption of president, but environment has changed dramatically. So in a high uncertain environment, but still, we would like to engage in financial activities with prudence and boldness to build a solid foundation for net asset value growth. And to make such a growth, we do need to think what is the best action that we should be making at the time. So as a company, for decision-making point-wise, our capital allocation is only three new investments. return to shareholders, or enhancement of the balance sheet. So we would like to pursue the best mix and best balance of those three so that we'll be able to enhance our enterprise value. So continuously, we would like to work on that. And that's something that we always discuss internally, especially when it comes to the financial activity-wise, investment, financing, loan-to-value. Those are the strengths that we have. And as we've been cultivating the financial foundation developed over years of disciplined financial management so that we would like to swiftly address any market fluctuation, market change. And at the same time, we would like to respond in synchronized with management processes. So we have MASA, board of directors meeting, board of directors members, that we would like to keep the space with them so that we'll be able to synchronize with their movement, their actions, and at the same time to address any changes in the market financing. Always like to explore the variety of the option. And we've been addressing many optionalities as well. Try to meet up the needs at the time. So, for example, is it the bonds? Is it the loan or in debt? And we would like to understand and take advantage of each market, considering the stakeholders in the bond market, loan market. having a good discussion so that we'll be able to choose the best of the scheme for the financing activities. In loan-to-value, we would like to maintain strict discipline in loan-to-value management. Last year, $7.9 billion, close to $8 billion. The previous year was $3.9 billion. So compared to 2023 fiscal, 2024 was about doubled. And this year, it's as of April 15, 2025. But because we had several large acquisitions, so actually the amount has been accumulated. And after this... As I mentioned about the commitment to open AI, up to $30 billion. And also 6.5 of Ampere is going to be coming this year so that we believe that the amount can be larger for the investment. But still, I believe we'll be able to keep the good balance with our safetiness on the soundness of our financials so that we'll be able to make a healthy growth of the business. And so like a safetiness, healthiness, and also the growth is something that we would like to pursue and also like to share. with the stakeholders because of the The first investment in OpenAI and also the Ampere acquisition was parallelly addressed. Therefore, 6.5 of the Ampere and also 8.5 of the OpenAI for loan investment, total 15 billion. It's about 2.3 trillion Japanese yen probably. That's quite a large amount, and we made it structure the bridge loan. But fortunately, we were able to have a very good... bank groups to be able to have this bridge loan to be structured. 15 billion syndication here. Actually, demand has more than two times more than that. So 20 institutions, Mizuho, JP Morgan, SMBC, and other important bankers, actually twice that speed of the project that we were able to conclude. OpenAI, Ampere, those are very strategic investments for our future growth, and we have a target for the next phase. So we believe. three years, five years ahead. We always share with the bankers how we are looking at the future. So whenever we have such a project, we are very much thankful for those bankers to be able to address such needs because I believe we have a good communication with those bankers for a future outlook and a strategy. Share buyback, share repurchase also, I would like to share with you the status. Last year, August, we have made an announcement of the maximum 500 billion of the share repurchase, and we have done 286 billion. So it's 57% progress so far, and we will be expanding. aiming towards the maximum 500 billion with the optimal way of buying back our shares. Dividend, no change. This time again, 22 yen for interim, year-end 22 yen per share. We would like to maintain this dividend per share. I believe this is also in line with under this forecast. But I saw some different numbers in some coverage, but I believe the majority of the people has an in-line forecast with this dividend. And fiscal 2024 highlights net asset value, financial policy, net income, and Stargate Open AI actual actions. Those are the kind of highlights for the fiscal 2024.

So I thought I should show Masa-san a picture, at least one. I don't know if he's watching this today or not, but anyway, realizing ASI for human evolution is what he talked about last year. So what is the business Softbank Group is doing? Often asked that question. Softbank Group is an information revolutionist. That would be our answer because it's our mission and Our vision is to realize information revolution looking back. Our philosophy has been always consistent. So what is the information revolution then? When you start a business, Mr. Son used computer software by himself, and he wanted all people in Japan to utilize software. But there were no ways for the general public to purchase software, computer software, because there were not electricity, sorry, home appliance shops. to easily buy a computer software. So he started a company to sell computer software. He started it as a distributor of computer software. And the users want to know in advance what's fun with the software or the game. So he started publishing business. He provided publishing. for the people to understand what's good about software. So selling software or distributing publishing, that's an infrastructure he wanted to build for companies to utilize technology. In 2000, from the scratch, He wanted to start a broadband business, which was a surprise for me. And from a finance guy perspective, it was not an easy job to support the launch. He wanted to start a broadband business because he wanted people to use his services at a very speedy speed. And we went through a challenging time. times in terms of financing the business and running the business. And we have been doing this consistent thing even though our product offerings are different, but those product offerings are for people to use information service. So we provide infrastructure for people to use information service. So we have been consistent from the beginning, which is to provide basic infrastructure for people to use information service. I showed this slide earlier. A year ago, Did we have all tools in the toolbox? Not. We had ARM in AI chip place and we had robot business in AI robot. But when it comes to data center, we didn't have a tool. Energy, we didn't have a lot. But since then, we have a lot more tools in a toolbox. So we can play a baseball game in the professional league as opposed to an amateur league, if you will. So Sotan Group has been pretty good, and we are capable enough. Eighteen years ago, we used this chart for the financial result announcement. to explain what kind of businesses we wanted to deliver. Likewise, we had three layers, infrastructure and portal and content. We wanted to have all layers in place to deliver our product offerings. And now, in the era of AI, we are doing pretty much the same as 18 years ago. I didn't really copy the format of the presentation of 18 years ago, but I realized we are doing pretty much similar thing than before. We have been growing. It's been 20 years since the inception of the company, but our role in AI and ASI is something that we keep thinking about myself. Thank you.

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 who are on Zoom, please access to the Zoom. and press raise hand button and wait for your name is called. If you would like to withdraw your question, please press lower hand button. Please also refrain from connecting to other live stream to avoid any echoing. For those who are on Japanese Zoom, please make your question in Japanese. We would like to take up to two questions per person so that we can take questions from as many people as possible. So first, we would like to take questions from Flora. If you have any, please raise your hand. Thank you. The first front row person, please. from Yomiuri Newspaper. I have two questions. First is about Stargate. So thank you for sharing the progress of Stargate. But tariff situations by Mr. Trump, semiconductor requires for the data center maybe have a price change due to the tariff, and the environment has been changing. Is there any effect to the current preparation or how much impact do you see from such tariff policy? And my second question is about OpenAI. Recently announced that they give up on restructuring to the profit organization. But OpenAI global additional investment has any impact from that change? That's my two questions. So Stargate, for your first question, that was announced in January. The tariff discussion has not been started back then. So compared to that time, that was actually the event after the announcement of the Stargate project. But still, things are changing every day. So at this moment, I don't want to be too specific about And we try to explore the best decision, best option at the time. But I don't think the type itself is going to stop the project progress or something like that. We would like to wait and see a little bit. But more than that, project itself is something that we would like to make sure to launch, and that negotiation is very important for us. For your second question about OpenAI, Recently, OpenAI updated their blog, and also the media has been covered, and there was some misunderstanding. See, like you said, the media saying giving up on becoming the profit organization. I don't think that's the correct understanding. the shareholder or the holding company is the non-profit, and underneath the company which does the business, But more specifically, nothing has been changed at this moment. They just show the direction of the structure. That's what's been announced. So at this moment, nothing has really happened or changed, just to discuss the direction. And for us, I don't think that that's the wrong direction, a bad direction. That's something that we've been expecting. And our investment is in the business vehicle, and this is hopefully that they'll be able to grow. Then I believe that's a good thing for our investments.

Thank you. Next question, please. Ayagi from Nikkei. First question is about OpenAI. Investment amount, what would it be? Investment amount would be half or 30 billion remain the same? And before such press coverage was there, what kind of conversation did OpenAI have with you? So investment amount of to OpenAI as an underwrite of 40 billion. As you can see in the chart in my presentation, Investment from Sopin Group, I believe, is your question. Even though we underwrite 40 billion, but of them, 10 billion would be syndicated to third-party investors. So our principle is 30 billion as an investment amount. Probability-wise? What if there is no third-party investor? It could be $40 billion, but in fact, already some investment was made. So it's not going to be $40 billion in total because already some part was syndicated. and commitment will be from 40 to 20 then our investment would be up to 20 billion according to a certain condition so we assume the maximum investment amount to drive our financial strategy so at this moment I believe the term was included in the agreement that could reduce the amount down to 20 billion. At the moment, is that such event happening? No, event is not happening now. So if such event takes place by the end of the year, then reduce from 40 to 20. We never know when such event takes place. Then second question again about OpenAI, your investment amount could be up to 3 trillion yen maximum. Then are you going to be a major shareholder of OpenAI or leading investor of OpenAI or you How do you want to position OpenAI after following investment? Well, our investment amount, you mentioned major shareholder or subsidiary, even though we invested 30 billion, still minority investment. It's not gonna be our making OpenAI as a subsidiary. The first investment in April was done by Vision Fund 2. We had made investment in OpenAI last year several times, and we did investment several times since the beginning of FI 2020, sorry, current year 2025. Because the small amount, because of that, we wanted to utilize Vision Fund as a vehicle. But now we are talking about big number. So we want to figure out the best for us to make an investment in such a big amount in open AI.

Any other questions, please? Then third row from the front. MJ from Bloomberg. Different subject. Recently, SoftBank has an investment in relation to crypto that media coverage has been shared. Last time you made an investment in FTX and after making a loss from FTX, I believe that the SoftBank was not paying too much attention to the crypto. But what is the background for setting up this venture company? So we made an investment in a company called Tether. Personally, I hate, I don't like crypto, but that's nothing to do with a business decision. But the crypto itself is becoming certain level of the size as an asset to be managed. And there are many investors And I believe this vehicle or the entity will be able to provide opportunities for the investors to invest or to manage their assets. Of course, we are not investing the bitcoins or the crypto itself, but investing in such an entity which will provide investment. Made available for the access by the investors for the Tether and Tether's group allocation. How are they going to grow is one of the questions. And of course, we need to learn more about the crypto market. So that's why we come to this decision of investing in this company a little bit deeper than we used to have as a position of the crypto. But it's not that we are going to directly investing in or selling crypto itself. My second question is about OpenAI once again.

So the Vision Fund will be investing quite a big amount in OpenAI. That seems to leave little room for extra investments in other companies. So I'd like to ask the overall strategy for Vision Fund going forward in the new fiscal year. Thank you.

Yes. For Vision Fund 2, we don't have any limitations of the size of the fund. So if it's necessary, if there is any necessary funds, we can upsize the Vision Fund 2. This time, April, OpenAI investment was a large amount. But that doesn't mean that we are not going to do any other investment at all. We will be. looking into good pipelines explored by the great fund managers, investment managers in Vision Fund. And if there is any good companies, we would like to make investment in such.

Thank you. Any other questions from the floor? Shota from TV Tokyo. Sorry, again, a question about open AI. If investment amount was down from 40 to 20, a project like a Stargate project, what kind of a difference would that make in the project that you are working on with OpenAI? Could you give us a color, please? Yes. If amount down from 40 to 20, well, 20 is still big enough, 3 trillion yen. It's not going to change relationship between OpenAI and SoftBank Group. We are together running a big business project, and I believe that OpenAI is closest to us than any other companies to drive AI efforts, be it Crystal Intelligence or Stargate. They are huge and very close relationship. So it doesn't matter whether our investment amount is 40 or 20. or big or small. Thank you. Next question. Looking at SoftBank's group's history, you have been captured advantage of borderless information service or information itself, and if going forward, information will be limited by national borders, what kind of impact or negative impact that you should anticipate? What your political risks are, I think what you are talking about, you are right. geopolitical risks could have an impact on services and businesses. And if US-China tension continues and even becomes more serious, then investment activities in different areas may be not in sync anymore, but still we have to continuously running a business no matter what would happen. We are in the West, if you will, and then we need to run the business in the context of network on the West side of the world. But still, we have had a relationship with the great business leaders in China. There are still great entrepreneurs and business leaders in China. And to be very blunt with you, we'd like to work with them, but we need to focus on the immediate priority. I cannot answer your question easily, but we have to continuously make an effort to maximize our corporate value under the circumstances.

Any other questions, please? The second row from the front. Kagoshima from Kyodo Tsushin, relates to the previous question. So this fiscal year, business forecast, performance forecast, or the Stargate forecast wise, what is the biggest risk you're expecting? So for the tariff, I believe that you said that it may not have a large impact on the Stargate project, but what is the biggest risk from your understanding at this moment? As a SoftBank Group overall, from the tariff point of view, I don't believe not many portfolio companies may be negatively impacted from the tariff. I may need to address a little bit if there is any from the tariff point of view. When you look at Fulvia as an investment company and try for the performance of investment activities, we have a large portfolio and growth in the big portfolio is one of the risks. For example, Arm is one of the biggest portfolio. So asset value of Arm is may be negatively impacted for many reasons, that can be one of the risks for our investment performance. And also, if the business performance of the large investment can be another risk, for example, we are going to make a big investment in OpenAI. If there is any... at all for the damage to the value of the business. That's going to be another risk for us as an investment company. Jason, can you comment about the tariff impact on business?

Yes. So regarding tariffs, as Kota-san said, it's a very, very dynamic situation. But as of right now, tariffs don't apply to design or design services, which is what ARM provides. It's only on the end product. There is some discussion that there may be tariffs on the actual chips, which could have impact. But of course, today we provide designs for chips. We don't actually sell full chips. So I think it remains to be seen exactly how the tariff situation plays out. I would say as it relates to Stargate, there's a lot of partnership between, I know, South Bank and ARM and all the different parts of the portfolio with the U.S. government on that project. And so I would expect that whatever tariff policy is decided would probably not be detrimental to the overall project, but we'll see.

Thank you.

For vision fund, Navneet, do you have any comments about the tariff impact with the vision fund and vision fund activity itself?

Yes, sure. So in terms of tariffs, you know, it really depends on three factors, the level, duration, and the type of tariffs. And, you know, the first two are, you know, relatively easily understandable. But the latter matters more to us as most tariffs are on physical goods. And if you look at the Vision Fund investments that we have made, about 500 or so investments over the last eight years, the majority of our investments are what we call high-value assets. you know, companies like ByteDance, Coupang, Didi, Pepe, Revolut, Klarna. And they are IP heavy, but asset light by nature of being AI native. So, you know, the net of all of this is that there is very limited impact of the tariffs on our portfolio companies. Thank you.

so we are going to take questions from online participants and please make sure you turn off a live stream other than this zoom connection to avoid echoing. Again, if you are on a Zoom Japanese, please ask question in Japanese. First, Sato-san from Nikkei Asia. Can you hear my voice? Thank you, Sato-san. The first question is about OpenAI. So whether an event stipulated in terms in agreement, is it going to take place or not? You will see, you said. But I wonder whether OpenAI explained to you where they would go. Yes, talking about reorganization. Of course, our conversation is based on the assumption that reorganization would take place. There are different stakeholders, however. And some people may intervene in this project. And this may not go as smooth as we hope. But it's out of our control. So we are just wait and see what will happen. Not really. just on a negative time but positive time since the announcement of open ai in april sorry may you still remain close relationship with open ai yes a second question is about ampere graph core and sphere you acquired a 8,000 talents or engineers so going forward not only CPU but the processors or AI semiconductors you want to expand the area that's why so 8,000 semiconductor engineers do you have all parts in place to expand the areas Most of the engineers are ARM engineers. So not only CP, but also you want to increase the number of engineers for processor in area. So Jason-san, could you elaborate on that, your direction?

So in terms of the capabilities, certainly within the SoftBank portfolio, Arm obviously provides significant capability across the design side for CPU, GPU, MPU technologies. And certainly Ampere is a great partner, a company that we actually – have had an investment in. And Ampere is unique. It's a team of ex-engineers that came from Intel that had a lot of experience taping out world-class and developing world-class server and server chips. Previously on x86, they then brought that technology to ARM. So they actually taped out at least five different chips, server chips, on ARM. So that was certainly because of the partnership that ARM has had with them, that was a great acquisition that we have a lot of synergies with. In terms of Graphcore, they are a company that has a history of building GPU or NPU accelerator products, and they have taped out a number of products over the years and have also had – had a lot of success in that area. That is an area that ARM has not worked in in the past, and so I would say there's very much a high synergy or complementary aspect across all three companies. In terms of capabilities to address the opportunities for Stargate, there definitely is from a CPU and possibly beyond, but no products have been announced thus far, but certainly lots of capabilities have been created. Thank you.

Thank you. So just to make sure I understood correctly the translation, so the number of current semiconductor engineers are enough to have a capability for AI semiconductor in the future? Is my understanding correct?

To actually completely get to a full tape out and development of a chip, there typically is a large design capability. I would say we have most of the capability across certainly those three companies. In terms of being able to, you know, typically to get to the more complex chips, it requires working with others, typically ASIC or application-specific integrated circuit providers. And so I would say the combination of the technology in-house as well as some of the different partners that ARM, I think GraphCore, and I know Ampere all work with, I would say the capability is is largely either in-house or under contract.

Thank you very much.

Thank you. Next question. Mr. Masano from Nomura Segurities. Please unmute and start your question. This is Masano speaking. I have two questions. One is about robot holdings. Looking at the robot has been focused very much. Then there are several robot activities, and at this time, SBG, 10 out of SoftBank Group and six from the Vision Fund to set up the robot holdings, and mainly SoftBank Group is going to be the shareholder, which is a good structure and very interesting as well. So I am... excited to see the rapid movements here. And for the robotics, I believe that the main mainly held by and what is X backgrounds at the why that the holding companies becoming the main player for this robotics and robotics investments. Thank you for your question. Robot holdings is a very important challenge for us. As for robotics, Actually, we've been actually addressing this robotics for the past 10 years or so, and there are several portfolio companies which have the robotics expertise. Along with the AI development, robotics is going to be developed at the same pace, I believe, in the services in the market. including people's working styles, lifestyles, is going to be changed. That's very visible, and especially robotics is very visible from that sense. So many preparations have been done. Things have not been fully discussed here, but hopefully that you can be looking forward to, and Masa and ourselves are going to be directly involved in these robotics activities. Thank you. Personally, I believe it can be the same size of the business as Vision Funds. So I'm very much expecting on that. And my second question is about the investment, the objective of investing in OpenAI. So my understanding is that you would like to long hold the OpenAI by SVG for the future strategy and future expectations. But making a loan to Vision Fund from SBG and the Vision Fund. Not only that, but also having the MASA's individual guarantee, that was very surprising to me. I thought that it should be done by the SBG itself, but is it because to make the better performance for Vision Fund, for making the Vision Fund as an investor for the OpenAI? Thank you for your question. This is something that we have an internal discussion very seriously, and we have decided to make the vision fund as an investor. The logic is because Vision Fund has been the investor for OpenAI for the last phase, and that's starting as this is the minority investment. And also, many investors were participating in this financial round. And at the same time, they have a clear roadmap to the monetization. So that is why we have decided to use a vision fund. But loans, masses, part that we would like to... maintain the framework of Vision Fund 2 as much as possible, but at the same time, because the amount is large, so therefore we would like to utilize intercompany loan instead of preferred share so that we'll be able to get the return back faster. But still, there is a remainder for the investment amount, which is also not small. So that we would like to have this discussion internally so that we can decide. And I think it's too stretching to depending on Master's personal guarantee. We are not depending on that, but because of the structure from Vision Fund 2, we maintain the same structure for Vision Fund 2 to make this investment. That is why the approach becomes this way. Understood. Thank you very much.

So we'd like to conclude the Q&A. Thank you very much. The SoftBank Group Corp. Earnings Results Announcement for the fiscal year ended March 31, 2025 is now closed. The video footage of this meeting will be distributed on demand from our corporate website. Thank you very much once again for joining the SoftBank Group Corp. Earnings Results Announcement for the fiscal year ended March 31, 2025.