Before Arm's IPO, SoftBank had been increasing its investments, particularly in AI. The company is reportedly looking to invest tens of billions in AI after completing Arm’s IPO and is also considering investing in or collaborating with OpenAI. Despite the potential for a turnaround in fortunes, analysts suggest that prudent investors may remain cautious due to SoftBank's past investment misadventures.
Key takeaways:
- SoftBank's IPO for Arm Holdings was successful, but concerns remain due to SoftBank's past investment misadventures and the negative returns of several of its high-profile IPOs.
- Arm Holdings, which was acquired by SoftBank for $32 billion in 2016, is the single biggest investment in SoftBank’s portfolio. However, its revenues shrank marginally in 2022-23 due to tepid smartphone sales.
- SoftBank's cumulative losses from investments in the top 15 companies of its Vision Fund 1 that went public amount to more than $1.3 billion, despite having profitable investments such as Coupang and DoorDash.
- SoftBank is looking to invest tens of billions in AI after completing Arm’s IPO and is also looking to invest in or collaborate with OpenAI, the creator of ChatGPT.