00:00The Japanese conglomerate is in the spotlight amid wider concerns about climbing debt levels
00:04linked to the global AI build-out. So let's find out which numbers we should really be focused on.
00:09We can speak to Bloomberg senior strategist Neil Campling. Neil, I wonder what stands out to you
00:14from these numbers? Because you're looking at Nikkei futures slipping right now, and it seems
00:18like that's because there's a focus on net income falling. And the issue there seems to be that
00:26you've got to have Masayoshi Son pulling really a big rabbit out of the hat in the earnings call
00:31if you're not going to have soft ADRs off the back of it. So is that the line that you
00:38would focus on?
00:38Because there are other much more positive stories to focus on as well here.
00:41Yeah, as you mentioned, there's a lot of moving parts to this story. And we've still got the headlines
00:46just kind of coming out. But I think the headline positive is probably the fact that they're a big
00:52investment gain on the back of the Intel stake, which is like a 3x return in the quarter reported.
00:59On the other side, we've just seen some headlines coming out to say that the Vision Fund 2 is going
01:04to borrow $10 billion against the stake that SoftBank has in OpenAI, which of course is all still private
01:11and not public. So there's how do you mark that to market? And does that raise the questions around
01:16the whole circular funding stuff that's going on in the AI trade as well?
01:19So there's more questions and answers at the moment. So we need to get some more colour, I think.
01:24Yes, I was going to say, what does it, you know, does it tell us anything about the health of
01:27the
01:27overall AI trade? And I mean, maybe it's too soon to tell. Based on what you just said,
01:32it reminds us of the circular nature of some of these relationships, perhaps.
01:36It does indeed. And of course, the SoftBank close relationship with NVIDIA. And NVIDIA has been
01:41sort of the champion, the king, if you like, of a lot of these kind of transactions.
01:46And we'll hear from them in a couple of weeks to see what they're saying. So there are many
01:51moving parts. But you could also argue, why does the Vision Fund need to borrow money from the
01:55parent's stake in another company, as opposed to going to external investors?
02:00And so what happens if OpenAI delays its IPO? What's the consequence then for SoftBank?
02:05Well, this is another big, hot topic of conversation in terms of the legal battles that OpenAI have
02:11at the moment. We're seeing lots of management changes within the various companies in the AI
02:15stack, as we saw from Google yesterday. And then we've got this battle, I think, between
02:20Anthropik and OpenAI as to who comes to market first, because the one that's the last to come
02:24to market may face a more challenging environment in terms of investor testing the valuation parameters.
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