(May 25): SoftBank Group Corp shares climbed to a record high, spurred by hopes of big returns from the Japanese investor’s stakes in OpenAI and SB Energy Corp, should the two go public.
SoftBank’s shares rose 4.6% in Tokyo trading Monday, as tech shares gained on optimism over artificial intelligence (AI) demand. That took their gains from May 20 to 40%, pushing the company’s market value above ¥40 trillion (US$252 billion or $320 billion).
A powerful two-day surge last week propelled SoftBank’s stock after reports that OpenAI was preparing to file for an initial public offering (IPO) in coming days. Power infrastructure unit SB Energy also said it plans to confidentially file for an IPO in the US.
The sharp rebound shows a shift in investor sentiment, with signs that OpenAI may be moving closer to an IPO dispelling some of the concerns about rising competition to OpenAI from the likes of Anthropic PBC, Google and xAI Corp.
The market is “extremely pleased” to see OpenAI’s long-anticipated IPO may be nearing reality, said Takashi Nakagawa, senior analyst at TokaiTokyo Intelligence Laboratory Co. Such a move would improve transparency over opaque valuations around AI, he said. SoftBank’s investment portfolio is heavy on AI-led, closely held startups.
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“Right now the stock is moving purely based on expectation,” Nakagawa said. “I want to see how OpenAI’s market capitalisation will stabilise.” The Japanese retail investors’ darling, SoftBank, comprises an outsized portion of the benchmark Nikkei 225 average, while newsflow about its portfolio companies, which include ByteDance and Coupang, has the potential to move its stock.
The rally last week was further supported by gains in Arm Holdings plc’s shares following Nvidia Corp’s earnings results and rising expectation of AI proliferating throughout society.
SoftBank is one of OpenAI’s largest shareholders, and has committed a further US$20 billion ($25.54 billion) for a total investment of close to US$65 billion. That would give it a roughly 13% stake in the ChatGPT developer by October.
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SoftBank-backed SB Energy, which focuses on power generation and grid management, has been central to founder Masayoshi Son’s ambitions to roll out data centres across the US. The unit raised more than US$1.8 billion over the past year from SoftBank, OpenAI and Ares Management.
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