SoftBank shares rise as Son flags ‘offense mode’ in AI push

Investing.com -- Shares of Japanese technology conglomerate SoftBank Group Corp (TYO:9984) rose on Wednesday after founder Masayoshi Son said that the firm will go on the offensive and attempt to capitalize on a boom in artificial intelligence. 

Speaking during a shareholders’ annual general meeting, Son said that the investment firm plans to shift to “offense mode” from “defense mode,” and will focus chiefly on growing interest in AI.

Shares of the firm rose nearly 3% in afternoon trade, defying a broader downturn in technology stocks as markets awaited testimony from Federal Reserve Chair Jerome Powell later in the day.

Son said that SoftBank (OTC:SFTBY) intended to be “in the leading position for the AI revolution,” and that the firm had accumulated about ¥5 trillion ($1= ¥141.70) in cash to carry out its offensive.

His comments come as SoftBank, which chiefly carries out venture capital investing through its flagship Vision Fund, faces increasing pressure from a decline in the value of its tech investments.

The Vision Fund logged a record ¥5.32 trillion loss in 2022, which saw the firm begin offloading its profitable investments, mainly Alibaba Group (NYSE:BABA)  (HK:9988), to maintain cash flow.

Recent reports also suggest that SoftBank is planning a round of layoffs at its Vision Fund, as the fund struggles with declining tech valuations amid rising interest rates across the globe.

But SoftBank may be positioned for a turnaround this year, especially as interest in AI development picks up and as it proceeds with the long-awaited listing of its chip designing unit Arm. 

Arm has remained among the few bright spots in SoftBank’s holdings, and is expected to greatly benefit from increased chip demand this year as AI development increases.

Some of the biggest global chipmakers, including Nvidia Corp (NASDAQ:NVDA), AMD (NASDAQ:AMD), and TSMC (TW:2330), use Arm infrastructure. The unit is set to list on the Nasdaq later this year, after several delays in its listing plans.

SoftBank is also banking on the cash injection from the Arm offering to fund investments into other ventures.